UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K/A
(Amendment No. 1)
______________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 22, 2013
Cytomedix, Inc.
(Exact name of registrant as specified in its charter)
______________
| Delaware | 01-32518 | 23-3011702 |
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer |
| of Incorporation) | File Nu mber) | Identification No.) |
209 Perry Parkway, Suite 7, Gaithersburg, MD 20877
(Address of Principal Executive Office) (Zip Code)
240-499-2680
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
On November 22, 2013, Cytomedix, Inc. (the “Company”) filed a Current Report on Form 8-K disclosing, among other things, the terms of signed subscription agreements and other related agreements and documents relating to the sale of 10% subordinated convertible notes (the “Notes”) and warrants to purchase shares of the Company’s common stock for gross proceeds of $3 million (the “Offering”) (the “November 22, 2013 8-K”). The Company hereby incorporates by reference the contents of the November 22, 2013 8-K. The purpose of this Amendment No. 1 to the November 22, 2013 8-K is to file subscription and other related agreements and documents relating to the Offering as exhibits to this filing. Capitalized terms used here but not defined shall have the same meaning as was assigned to them in the November 22, 2013 8-K.
The descriptions of the Subscription Agreement, the Notes, the Warrants and the Registration Rights Agreement contained in the November 22, 2013 8-K did not purport to be complete and were subject to copies of such agreements and documents filed as exhibits to this Report. The representations, warranties and covenants contained in such documents and agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and (i) should not be treated as statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in the agreements by disclosures that were made to the other party in connection with the negotiation of the agreements; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of such agreements or such other date or dates as may be specified in the agreements. Except as described herein, the information contained in the November 22, 2013 8-K has not been updated or amended, and the Company undertakes no obligation to update or revise the information set forth herein, whether as a result of new information, changed circumstances or future events or for any other reason.
| Item 9.01 | Exhibits |
| 4.1 | Form 10% Subordinated Convertible Note. |
| 4.2 | Form Common Stock Warrant. |
| 10.1 | Form Subscription Agreement. |
| 10.2 | Form Registration Rights Agreement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Cytomedix, Inc. | |||
| By: | /s/ Martin P. Rosendale | ||
| Martin P. Rosendale | |||
| Chief Executive Officer | |||
Date: November 27, 2013
THE SECURITIES REPRESENTED BY THIS NOTE, INCLUDING THE SECURITIES ISSUANCE UPON CONVERSION OF THE NOTE, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.
This instrument or other agreement and the indebtedness, rights and obligations evidenced hereby and any liens or other security interests securing such rights and obligations are subordinate in the manner and to the extent set forth in that certain Subordination Agreement (as amended, restated, supplemented or modified from time to time, the “Subordination Agreement”), dated as of November [__], 2013 by and among the Subordinated Lenders identified therein and MidCap Funding III, LLC, in its capacity as agent (together with its successors and assigns, “Agent”) for the Senior Lenders( as defined in the Subordination Agreement), to certain indebtedness, rights and obligations of Cytomedix, Inc., Aldagen, Inc. and Cytomedix Acquisition Company, LLC, to Agent and the Senior Lenders (the “Senior Debt”), and all liens and security interests of Agent securing the same, all as described in the Subordination Agreement, and each holder and transferee of this instrument or agreement, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.
FORM 10% SUBORDINATED CONVERTIBLE PROMISSORY NOTE
| $[_] | Gaithersburg, Maryland |
| [_], 2013 |
FOR VALUE RECEIVED, Cytomedix, Inc., a Delaware corporation (the “Company”) promises to pay to the order of [_] (“Holder”), at [_], or at such other location as Payee may from time to time designate, the principal sum of [_] Dollars ($[_]), together with interest on the unpaid principal sum from time to time outstanding at the rate of ten (10%) percent per annum from the date of this note until this note is paid in full. Subject to the provisions of the Subordination Agreement, interest accrued on the Note shall be due and payable in equal quarterly payments of [_] Dollars ($[_]) or in shares of the Company’s commons stock as set forth below, beginning on [_], 2014 and continuing thereafter on the first day of each and every quarter until paid in full 91 days following Payment in Full (as defined in the Subordination Agreement) of the Senior Debt (“Maturity Date”). No payment will be late under this Note if Holder receives it by the tenth (10th) day of the month after which the payment is due. Payment for all amounts due hereunder shall be made by wire transfer of immediately available funds, in lawful tender of the United States, to an account designated in writing by the Holder. This Note is issued pursuant to that certain Subscription Agreement by and among the Company and the investors described therein, dated as of the date hereof, as the same may from time to time be amended, modified or supplemented (the “Subscription Agreement”). Capitalized terms used in this Note that are not defined herein shall have the respective meanings given such terms in the Subscription Agreement. The Holder of this Note is subject to certain restrictions set forth in the Subscription Agreement and shall be entitled to certain rights and privileges set forth in the Subscription Agreement. This Note is one of the 10% Subordinated Convertible Promissory Notes referred to as the “Notes” in the Subscription Agreement. The following is a statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof, by the acceptance of this Note, agrees:
1. Definitions. As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:
(i) “Common Stock” shall mean the shares of Company common stock par value $0.001 per share.
(ii) “Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(iii) “Company” includes any corporation that, to the extent permitted by this Note or the Subscription Agreement, shall succeed to or assume the obligations of the Company under this Note.
(iv) “Holder,” when the context refers to a holder of this Note, shall mean any person who shall at the time be the registered holder of this Note.
2. Interest. Until all outstanding principal and all accrued and unpaid interest on this Note shall have been paid (or converted into shares of Common Stock, as set forth hereunder) in full, interest on the unpaid principal balance of this Note shall accrue from the date hereof at the rate of ten percent (10%) per annum (the “Interest Rate”), subject to adjustment as set forth herein below, payable quarterly in cash (subject to the terms of the Subordination Agreement) or, at the sole option of the Company, in shares of the Company’s common stock valued at fair market value on the date prior to the interest payment date, subject to adjustment.
3. Events of Default. If any of the events specified in this Section 3 shall occur (herein individually referred to as an “Event of Default”), the Company agrees to give the Holder prompt written notice of such event.
(i) Any breach by the Company of any material representation, warranty or covenant in this Note or the Subscription Agreement which results in a material adverse effect on the Company’s business, operations or financial condition; provided, that, in the event of any such breach, such breach shall not have been cured by the Company within sixty (60) days after written notice to the Company of such breach; or
(ii) The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action.
If an Event of Default described above shall occur for any reason and so long as such condition exists or has not been cured during the applicable cure period, subject to the terms of the Subordination Agreement the Holder may, upon notice to the Company, declare all or any portion of the outstanding principal amount of the Note, together with interest accrued thereon, to be due and payable and any or all other obligations hereunder to be due and payable, whereupon the full unpaid principal amount hereof, such accrued interest and any and all other such obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand, or presentment.
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4. Prepayment. Subject to the Subordination Agreement and the Senior Debt documents, the Company may prepay, without penalty, at any time prior one hundred twenty (120) days following the Closing and provided the Company has an effective registration statement on Form S-1 covering the Registrable Securities (as the term is defined in the Registration Rights Agreement by and between the Company and the Holders of the Note dated as of the date hereof) on file with the SEC at the time of such prepayment, all amounts due under this Note in consideration of one hundred and ten (110%) of the amount of the Note plus any accrued interest thereon upon fifteen (15) days’ advance written notice to the Holder, during which notice period the Holder may convert the amounts of under this Note in accordance with this Agreement.
5. Conversion. The Holder has the option to convert all or a portion of the unpaid principal balance of the Note, plus all accrued but unpaid interest, at the Conversion Price (as defined below), into fully paid and non-assessable shares of Common Stock (the “Share Conversion”) anytime after the date of issuance of this Note but before the Maturity Date. The Holder may make its election for a Share Conversion by delivery of a notice of its election to exercise its conversion option to the Company. Conversion of this Note shall be deemed to have been made at the close of business on the date the Company received the Holder’s notice of its election to exercise a Share Conversion (the “Conversion Date”). Any notice of Share Conversion received on a weekend or recognized United States holiday shall be deemed received on the close of business of the immediately following business day. The number of shares to be issued will be determined by dividing (x) the dollar amount of principal and accrued interest to be converted by (y) the Conversion Price.
As used herein, the term “Conversion Price” refers to the price equal to eighty five (85%) percent of the average daily VWAP for the ten (10) trading day period immediately following the Good News CMS Reimbursement Event (as defined below), provided, however, that in no event shall the Conversion Price be greater than $0.75 per share.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed on the NYSE Mkt LLC or any other national securities exchange (the “Trading Market”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the common stock is then listed as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if quoted in the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
As used herein, the term “Good News CMS Reimbursement Event” shall be understood to be a final ruling by the Centers for Medicare & Medicaid Services included in the “CY 2014 Changes to the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (CMS-1601-FC)” resulting in an approved reimbursement rate for the Company’s AutoloGel product of at least $450 per treatment.
6. Upon the Conversion Date, as applicable, the Company shall reflect in its books and records the new shares that have been issued to the Holder and will have the Company’s transfer agent reflect such transfer on its records.
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In the event the Company should at any time or from time to time after the date hereof fix a record date for (i) the effectuation of a split or subdivision of the outstanding shares of Common Stock or (ii) the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock, then, as of such record date (or the date of such dividend, distribution, split, or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately adjusted in proportion to such change in the number of outstanding shares to ensure that such adjustment does not decrease the conversion value of the Note.
If, at any time within six (6) months from the date hereof, the Company sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section in respect of an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, consultants, officers or directors of the Company pursuant to any stock or option plan or agreement duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, (c) securities issued or to be issued by the Company pursuant to that certain Purchase Agreement dated as of February 18, 2013, as amended to date, by and between the Company and Lincoln Park Capital Fund, LLC, as amended to date, (d) securities issued pursuant to acquisitions or strategic transactions with a third party non-affiliate of the Company approved by a majority of the then disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
The Company shall use its reasonable best efforts at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of the Note; since the amount of shares issuable upon conversion of this Note is not currently determinable, the Company agrees to reserve a sufficient number of shares to fulfill its contractual obligations under the Notes as of the date of issuance and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal amount of this Note, in addition to such other remedies as shall be available to the Holder of this Note, the Company will use its reasonable best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.
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Notwithstanding anything herein to the contrary, the Company shall not issue to the Holder, and the Holder may not acquire, a number of shares of Common Stock upon conversion of this Note to the extent that, upon such conversion, the number of shares of Common Stock then beneficially owned by the Holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 9.99% of the total number of shares of Common Stock then issued and outstanding (the “Beneficial Ownership Limitation”). For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. For purposes of this Section, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be or (B) a more recent public announcement by the Company. Upon the written or oral request of a Holder, the Company shall within two trading days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
7. Covenants.
7.1 Affirmative Covenants of the Company. The Company covenants and agrees that, between the date hereof and the date of repayment of all principal and interest on this Note or a Share Conversion, the Company shall:
7.1.1 Ordinary Course Operations. Operate the Company’s business in the ordinary course.
7.1.2 Corporate Existence. At all times cause to be done all things reasonably necessary to maintain, preserve and renew its corporate existence and all material licenses, authorizations and permits necessary to the conduct of its businesses.
7.1.3 Properties. Maintain and keep its properties in good repair, working order and condition, normal wear and tear expected.
7.1.4 Compliance with Laws. Comply with all applicable laws, rules and regulations of all governmental authorities, the violation of which could reasonably be expected to have a material adverse effect.
7.1.5 Books and Records. Maintain proper books of records and account that present fairly in all material respects its financial condition and results of operations and make provisions on its financial statements for all such proper reserves as in each case are required in accordance with generally accepted accounting principles (“GAAP”), consistently applied.
7.1.6 Taxes and Other Liabilities. Pay and discharge when due any and all material indebtedness, obligations, assessments and taxes, except as may be properly extended or those subject to good faith contest or as to which a bona fide dispute may exist that is being diligently pursued.
7.2 Negative Covenants of the Company. The Company covenants and agrees that, between the date hereof and the repayment of all principal and interest on this Note, the Company shall not, without the prior notice to the Holder:
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7.2.1 Ability to Perform Obligations. Except for the Senior Debt, become subject to (including, without limitation, by way of amendment to or modification of), any agreement or instrument that, by its terms, would (under any circumstances) restrict the Company’s right to perform the provisions of this Note.
7.2.2 Dividends. Make a distribution upon its capital stock in cash.
7.2.3 Mergers, Etc. (i) Merge or consolidate with or into, or permit any of its subsidiaries to merge or consolidate with or into, any corporation, with the effect that immediately after such merger or consolidation the stockholders of the Company immediately prior to such merger or consolidation hold less than a majority in interest of the total voting power of the outstanding voting securities of the entity surviving such merger or consolidation, or (ii) sell, lease, transfer or otherwise dispose of all or any substantial part of its assets (except in the ordinary course of business), whether now owned or hereafter acquired, unless the Company or one of its subsidiaries would be the acquiring or surviving party in such transaction and no Event of Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.
8. Assignment. Subject to the restrictions on transfer described herein, the rights and obligations of the Company and the Holder of this Note shall be binding upon and benefit the successors and assigns of the parties. This Note may not be assigned or transferred by the parties except in accordance with the terms hereof.
9. Subordination. Holder covenants and agrees, that the payment of any and all of the amounts hereunder shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the payment in full of all Senior Debt as set forth in the Subordination Agreement.
10. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder; provided to the extent this Note is amended all Notes must be similarly amended as agreed to (in writing) by the Company and all holders of Notes.
11. Transfers. With respect to any offer, sale or other disposition of this Note, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder’s counsel, which counsel must be acceptable to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Promptly upon receiving such written notice and opinion, the Company, as promptly as practicable, shall notify such Holder that such Holder may sell or otherwise dispose of this Note, all in accordance with the terms of the notice delivered to the Company. Each Note thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Act, unless in the opinion of counsel for the Company such legend is not required. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
12. Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if faxed with confirmation of receipt by telephone or if mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties as set forth in the Subscription Agreement. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when personally delivered, faxed, or when deposited in the mail in the manner set forth above and shall be deemed to have been received when delivered.
13. No Stockholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other person the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company; and no dividends or interest shall be payable or accrued in respect of this Note or the conversion interest represented hereby.
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14. Usury. This Note is hereby expressly limited so that in no event whatsoever, whether by reason of acceleration of maturity of the loan evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder hereunder for the loan, use, forbearance or detention of money exceed that permissible under applicable law. If at any time the performance of any provision of this Note or of any other agreement or instrument entered into in connection with this Note involves a payment exceeding the limit of the interest that may be validly charged for the loan, use, forbearance or detention of money under applicable law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being the specific intent of the Company and the Holder that all payments under this Note are to be credited first to interest as permitted by law, but not in excess of (i) the agreed rate of interest set forth herein or therein or (ii) that permitted by law, whichever is the lesser, and the balance toward the reduction of principal. The provisions of this Section 14 shall never be superseded or waived and shall control every other provision of this Note and all other agreements and instruments between the Company and the Holder entered into in connection with this Note.
15. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware, excluding that body of law relating to conflict of laws; provided, however, in the event that any legal proceeding is brought against the Maryland Venture Fund (Department of Business and Economic Development of the State of Maryland, or the State of Maryland in connection with such entity’s investment hereunder, the parties to any such dispute agree to submit to the venue of the Maryland courts for purposes of resolving any and all such disputes.
16. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.
17. Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
* * * * *
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of this __ day of ___, 2013.
| Cytomedix, Inc. | |||
| By: | |||
| Name: | |||
| Title: | |||
| Name of Holder: | ||
| Address: |
| 7 |
NOTICE OF CONVERSION
(To Be Signed Only Upon Conversion of Note)
TO [_]
The undersigned, the holder of the foregoing Note, hereby surrenders such Note for conversion into shares of Common Stock of Cytomedix, Inc. to the extent of $[_] unpaid principal and accrued interest amounts of such Note, and requests that the certificates for such shares be issued in the name of, and delivered to [_], whose address is [_].
Dated: [_]
| (Signature must conform in all respects to name of holder as specified on the face of the Note) | ||
| (Address) |
42717-0000
DC\80701304.3
| 8 |
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR WITH ANY STATE SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS AND RULES.
CYTOMEDIX, INC.
FORM WARRANT
| Warrant No. [_] | Dated: [_], 2013 |
Cytomedix, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [_] or its registered assigns (including permitted transferees, the “Holder”), is entitled to purchase from the Company up to a total of [_] shares (as adjusted from time to time as provided in Section 9 hereof) of Common Stock (as defined below) (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $[_] per share (as adjusted from time to time as provided in Section 9 hereof, the “Exercise Price”), at any time and from time to time from and after the date of this Warrant (the “Initial Exercise Date”) through and including [_], 2018 (the “Expiration Date”), and subject to the following terms and conditions. This Warrant is one of a series of similar warrants (the “Warrants”) issued pursuant to one of several Subscription Agreements, dated as of [_], 2013, by and among the Company and certain other investors (each, a “Subscription Agreement”), providing for the issuance and sale of the Notes and Warrants by the Company to the Holder and such other investors. Capitalized terms used in this Warrant that are not defined herein shall have the respective meanings given such terms in the Subscription Agreement.
1. Definitions. The capitalized terms used herein and not otherwise defined shall have the meanings set forth below:
“Affiliate” of any specified Person means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” means the power to direct the management and policies of such Person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
“Common Stock” means the common stock of the Company.
“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
“Eligible Market” means any of the New York Stock Exchange, the NYSE Mkt LLC or the Over-the-Counter Bulletin Board (the “OTCBB”).
“Market Price” shall mean (i) if the principal trading market for such securities is an exchange, the average of the last reported sale prices per share for the last five previous Trading Days on the Trading Market, (ii) if clause (i) is not applicable, the average of the closing bid price per share for the last five previous Trading Days as set forth by the OTCBB or (iii) if clauses (i) and (ii) are not applicable, the average of the closing bid price per share for the last five previous Trading Days as set forth in the Pink Sheets. Notwithstanding the foregoing, if there is no reported sales price or closing bid price, as the case may be, on any of the ten (10) Trading Days preceding the event requiring a determination of Market Price hereunder, then the Market Price shall be determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it.
“Original Issue Date” means [_], 2013.
“Other Securities” refers to any capital stock (other than Common Stock) and other securities of the Company or any other Person that the Holder of this Warrant at any time shall be entitled to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to Common Stock, or that at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 9 hereof or otherwise.
“Person” means any court or other federal, state, local or other governmental authority or other individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Registration Statement” shall have the meaning set forth in the Subscription Agreement.
“Required Holders” shall mean the holders of the then unexercised Warrants issued pursuant to the Subscription Agreement, which represent a majority of the Warrant Shares underlying such unexercised warrants.
“Trading Day” means any day on which the Common Stock is listed or quoted on any Eligible Market.
“Warrant Shares” shall initially mean shares of Common Stock and in addition may include Other Securities and Distributed Property (as defined in Section 9(e) hereof) issued or issuable from time to time upon exercise of this Warrant.
“Weighted Average Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on the NYSE Amex LLC or any other national securities exchange (the “Trading Market”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the common stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is then quoted on the OTCBB, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTCBB, (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. All such determinations shall be appropriately adjusted for any share dividend, share split or other similar transaction during such period.
2. Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
| -2- |
3. Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto as Appendix A duly completed and signed, to the Company at its address specified herein. Upon any such registration and transfer, a new warrant in substantially the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.
4. Exercise and Duration of Warrant.
(a) This Warrant shall be exercisable by the registered Holder at any time and from time to time on and after the Initial Exercise Date to and including the Expiration Date. At 5:00 P.M. New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.
(b) A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto as Appendix B (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised, and the date such items are received by the Company is an “Exercise Date.” Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
(c) The Holder shall pay the Exercise Price (i) in cash, by certified bank check payable to the order of the Company or by wire transfer of immediately available funds in accordance with the Company’s instructions or (ii) if on or after the six (6) month anniversary of the Original Issue Date (x) there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder and (y) the Market Price exceeds the Exercise Price, by means of a “cashless exercise,” by presenting and surrendering to the Company this Warrant, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:
X = Y [(A-B)/A] where:
X = the number of Warrant Shares to be issued to the Holder upon such cashless exercise;
Y = the number of Warrant Shares with respect to which this Warrant is being exercised;
A = the Market Price on the Exercise Date; and
B = the Exercise Price.
(d) Notwithstanding anything to the contrary herein, Holder agrees that the no exercises of this Warrant or conversions of the Note sold in the Offering shall be permitted unless the Company has sufficient number of authorized common stock available to accommodate such exercises or conversions.
(e) Notwithstanding anything herein to the contrary, the Company shall not issue to the Holder, and the Holder may not acquire, a number of shares of Common Stock upon exercise of this Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by the Holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 9.99% of the total number of shares of Common Stock then issued and outstanding (the “Beneficial Ownership Limitation”). For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission, and the percentage held by the Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. For purposes of this Section, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be or (B) a more recent public announcement by the Company. Upon the written or oral request of a Holder, the Company shall within two trading days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.
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5. Delivery of Warrant Shares.
(a) Upon exercise of this Warrant, the Company shall within three Trading Days after receipt of the Exercise Notice attached hereto as Appendix B, issue or cause to be issued and deliver or cause to be delivered to the Holder, in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise bearing (only if such legend is required by applicable law) the restrictive legend set forth in Section 4(j)(ii) of the Subscription Agreement. The Holder, or any Person so designated by the Holder to receive the Warrant Shares, shall be deemed to have become holder of record of such Warrant Shares as of the Exercise Date.
(b) This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrant in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and in substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.
8. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are then issuable and deliverable upon the exercise of this entire Warrant, free from all taxes, liens, claims, encumbrances with respect to the issuance of such Warrant Shares and will not be subject to any pre-emptive rights or similar rights (taking into account the adjustments and restrictions of Section 9 hereof). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued, fully paid and nonassessable. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed or quoted, as the case may be.
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9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.
(a) Stock Dividends. If the Company, at any time while this Warrant is outstanding, pays a dividend on its Common Stock payable in additional shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, then in each such case the Exercise Price shall be multiplied by a fraction, (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the opening of business on the day after the record date for the determination of stockholders entitle to receive such dividend or distribution and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 9(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution.
(b) Stock Splits. If the Company, at any time while this Warrant is outstanding, (i) subdivides outstanding shares of Common Stock into a larger number of shares, or (ii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment pursuant to this Section 9(b) shall become effective immediately after the effective date of such subdivision or combination.
(c) Reclassifications. A reclassification of the Common Stock (other than any such reclassification in connection with a merger or consolidation to which Section 9(f) applies) into shares of any other class of stock shall be deemed:
(i) a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock for the purposes and within the meaning of this Section 9; and
(ii) if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock for the purposes and within the meaning of Section 9(b) hereof.
(d) Subsequent Financing. If, at any time within six (6) months from the date hereof, the Company sells or grants any option to purchase, or grants any right to reprice, or otherwise dispose of or issues, any Common Stock or Common Stock Equivalents entitling any person to acquire shares of Common Stock at an effective price per share that is lower than the Exercise Price, other than in connection with any Common Stock Equivalents outstanding on the Closing (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then the Exercise Price shall be reduced to equal one hundred twenty five (125%) of such Base Share Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 9(d) in respect of an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, consultants, officers or directors of the Company pursuant to any stock or option plan or agreement duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, (c) securities issued or to be issued by the Company pursuant to that certain Purchase Agreement dated as of February 18, 2013, as amended to date, by and between the Company and Lincoln Park Capital Fund, LLC, as amended to date, (d) securities issued pursuant to acquisitions or strategic transactions with a third party non-affiliate of the Company approved by a majority of the then disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
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(e) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition for value of any such shares shall be considered an issue or sale of Common Stock.
(f) Adjustments. Notwithstanding any provision of this Section 9, no adjustment of the Exercise Price shall be required if such adjustment is less than $0.01; provided, however, that any adjustments that by reason of this Section 9(e) are not required to be made shall be carried forward and taken into account for purposes of any subsequent adjustment.
(g) Adjustment of Number of Shares. Upon each adjustment in the Exercise Price pursuant to this Section 9, the number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Warrant Shares purchasable immediately prior to such adjustment by a fraction, (i) the numerator of which shall be the Exercise Price immediately prior to such adjustment, and (ii) the denominator of which shall be the Exercise Price immediately thereafter.
(h) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company will promptly deliver to the Holder a certificate executed by the Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring such adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price and the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable). The Company will retain at its office copies of all such certificates and cause the same to be available for inspection at said office during normal business hours by the Holder or any prospective purchaser of the Warrant designated by the Holder.
(i) Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any subsidiary of the Company, or (ii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction at least 15 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
10. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the Company shall make a cash payment to the Holder equal to (a) such fraction multiplied by (b) the Market Price on the Exercise Date of one full Warrant Share.
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11. Restricted Securities. The Holder represents and warrants that it (i) understands that the Warrant and the Warrant Shares have not been registered under the Securities Act and (ii) understands the restrictions set forth on the legend printed on the face of this Warrant.
12. Reserved.
13. Remedies. The Company stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
14. Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise Notice) shall be in writing and shall be mailed by certified mail, return receipt requested, or by a nationally recognized courier service or delivered (in person or by facsimile), against receipt to the party to whom such notice or other communication is to be given. The address for such notices or communications shall be as set forth in the Subscription Agreement entered into by the Holder and the Company. Any notice or other communication given by means permitted by this Section 14 shall be deemed given at the time of receipt thereof.
15. Warrant Agent. The Company’s transfer agent shall also serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any Person into which any new warrant agent may be merged, any Person resulting from any consolidation to which any new warrant agent shall be a party or any Person to which any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
16. Miscellaneous.
(a) This Warrant may be assigned by the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be modified, revised or amended only in writing signed by the Company and at least two-third (2/3) of the Holders of such Warrants and their successors and assigns; provided, however, that no such modification, revision or amendment shall materially and adversely treat one or more Holders in a manner that is disproportionate to such treatment of any of the other Holders.
(b) The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor upon exercise thereof, (ii) will take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, free from all taxes, liens, claims and encumbrances and (iii) will not close its shareholder books or records in any manner that interferes with the timely exercise of this Warrant.
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(c) The validity, construction and enforcement of this Warrant shall be governed by the laws of the State of Delaware and jurisdiction is hereby vested in the Courts of said State in the event of the institution of any legal action under this Warrant; provided, however, in the event that any legal proceeding is brought against the Maryland Venture Fund (Department of Business and Economic Development of the State of Maryland, or the State of Maryland in connection with such entity’s investment hereunder, the parties to any such dispute agree to submit to the venue of the Maryland courts for purposes of resolving any and all such disputes.
(d) Neither party shall be deemed in default of any provision of this Warrant, to the extent that performance of its obligations or attempts to cure a breach hereof are delayed or prevented by any event reasonably beyond the control of such party, including, without limitation, war, hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike, lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or order of any court, government or governmental agency, provided that such party gives the other party written notice thereof promptly upon discovery thereof and uses reasonable best efforts to cure or mitigate the delay or failure to perform.
(e) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
(f) In case any one or more of the provisions of this Warrant shall be deemed invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision that shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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The Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
| Cytomedix, Inc. | |||
| By: | |||
| Name: | |||
| Title: | |||
APPENDIX A
Form of Assignment
(to be completed and signed only upon transfer of Warrant)
For Value Received, the undersigned hereby sells, assigns and transfers unto _________ the right represented by the within Warrant to purchase _____________ shares of Common Stock of Cytomedix, Inc. to which the within warrant relates and appoints __________________________ attorney to transfer said right on the books of Cytomedix, Inc. with full power of substitution in the premises.
| Dated: | ||||
| (Signature must conform in all respects to name of Holder as specified on face of the Warrant) | ||||
| Address of Transferee: | ||||
APPENDIX B
Form of Exercise Notice
(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)
To: Cytomedix, Inc.
The undersigned is the Holder of Warrant No. ____ (the “Warrant”) issued by Cytomedix, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.
| 1. | The Warrant is currently exercisable to purchase a total of ______ Warrant Shares. |
| 2. | The undersigned Holder hereby exercises its right to purchase ___ Warrant Shares pursuant to the Warrant. |
| 3. | The Holder intends that payment of the Exercise Price shall be made as (check one): |
Cash Exercise _______
Cashless Exercise _______
| 4. | If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $________ to the Company in accordance with the terms of the Warrant. |
| 5. | If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder for the number of shares equal to the whole number portion of the product of the calculation set forth below, which is ________. The Company shall pay a cash adjustment in respect of the fractional portion of the product of the calculation set forth below in an amount equal to the product of the fractional portion of such product and the Market Price on the Exercise Day, which product is __________. |
X = Y[(A-B)/A]
X = the number of Warrant Shares to be issued to the Holder.
Number of Warrant Shares being exercised: (“Y”).
Market Price on the Exercise Day: (“A”).
Exercise Price: (“B”)
| 6. | Pursuant to this exercise, the Company shall deliver to the Holder Warrant Shares in accordance with the terms of the Warrant. |
| 7. | Following this exercise, the Warrant shall be exercisable to purchase a total of __________ Warrant Shares. |
| Dated: | Name of Holder: | ||||
| (Print) | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| (Signature must conform in all respects to name of holder as specified on the face of the Warrant) | |||||
42717-0000
DC\80701303.5
| 1. |
FORM OF SUBSCRIPTION DOCUMENTS AND INSTRUCTIONS
The following documents must be completed in accordance with the instructions set forth below and must be executed in order to determine whether you are an “accredited investor” as such term is defined in the Securities Act of 1933, as amended, and, if so accredited, in order to subscribe for the purchase of certain securities (the “Securities”) of Cytomedix, Inc., a Delaware corporation (the “Company”), consisting of: (i) 10% Subordinated Convertible Promissory Notes and (ii) a warrant to purchase shares of Common Stock (a “Warrant”). Each Warrant shall be exercisable for the number of shares of Common Stock set forth in the Warrant Exercise Price (as defined below) for five (5) years after the Closing.
1. Instructions.
(a) Subscription Agreement and Registration Rights Agreement. Be sure to carefully and fully read the Subscription Agreement and the Registration Rights Agreement, and execute the signature pages which are applicable to you. On the appropriate signature pages, you must sign, print your name (or the name of the entity on whose behalf you are signing), address and social security or tax identification number where indicated, and indicate the number of Securities subscribed for, the date of execution and the manner in which title to the Securities will be held.
(b) Confidential Investor Questionnaire. Be sure to carefully and fully read the Confidential Investor Questionnaire attached as Exhibit A to Subscription Agreement. On the signature page of the Confidential Investor Questionnaire, you must sign and print your name (or the name of the entity on whose behalf you are signing) where indicated.
A PROSPECTIVE SUBSCRIBER FOR SECURITIES MUST BE SURE TO CAREFULLY AND FULLY READ THE ACCOMPANYING OFFERING DOCUMENTS PRIOR TO RETURNING THE SIGNED SUBSCRIPTION DOCUMENTS.
2. Return of Documents. Originals of the signed Subscription Agreement and Confidential Investor Questionnaire should be delivered to the following address:
Cytomedix, Inc.
209 Perry Parkway, Suite 7
Gaithersburg, MD 20877
Attention: Steven A. Shallcross, CFO
3. Payment. Payment of the Purchase Price and the Closing shall be effected in accordance with Sections 1 and 2 of the Subscription Agreement.
If you should have any questions, please contact Steven A. Shallcross, CFO of the Company, at the Company’s principal executive offices located at 209 Perry Parkway, Suite 7, Gaithersburg, MD 20877, or by telephone at (240) 499-2680.
| 1 |
PLEASE PRINT:
| NAME OF SUBSCRIBER: | _______________________ |
| PRINCIPAL AMOUNT OF NOTES PURCHASED: | $______________________ |
FORM SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is being delivered to you in connection with your investment in Cytomedix, Inc., a Delaware corporation whose shares of common stock (the “Common Stock”) (“the Company”). The Company is conducting a private placement (the “Offering”) of securities, consisting of 10% Subordinated Convertible Promissory Notes (the “Notes”) and (ii) a five-year warrant to purchase shares of Common Stock (a “Warrant”) (the Notes and Warrants are referred to as the “Securities”). Each Warrant shall be for the number of shares of Common Stock set forth in the Warrant at an initial exercise price per share of one hundred twenty five (125%) percent of the Market Price (as the term is defined in the Notes) (the “Warrant Exercise Price”) for five (5) years after the Closing.
All funds received in the Offering prior to the Closing (as defined below) shall be, upon fulfillment of the other conditions precedent set forth herein, delivered to the Company, at which time the Notes and the Warrants subscribed for shall be delivered, subject to the terms and provisions hereof and as further described below, to you.
1. Subscription and Purchase Price
(a) Subscription. Subject to the conditions set forth in Section 2 hereof, the undersigned hereby subscribes for and agrees to purchase the number of Securities indicated above on the terms and conditions described herein. The principal amount of the Notes purchased is $__________. Subscriptions for lesser amounts may be accepted at the discretion of the Company. The undersigned shall also be entitled to a Warrant to purchase a number of shares of the Company’s common stock equal to seventy five percent (75%) of the number of shares of the Company’s common stock into which the Notes may convert at the Closing at the Warrant Exercise Price for five (5) years after the Closing.
(b) Purchase of Securities. The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange for the Securities shall be $________, for an aggregate purchase price as set forth on Page 10 hereof (the “Aggregate Purchase Price”). The undersigned understands and agrees that, subject to Section 2 hereof and applicable laws, by executing this Agreement, he, she or it is entering into a binding agreement.
2. Acceptance, Offering Term and Closing Procedures
(a) Acceptance or Rejection. The obligation of the undersigned to purchase the Securities shall, subject to the investor accreditation process, applicable securities laws and the closing conditions contained in this Section, be irrevocable and the undersigned shall be legally bound to purchase the Securities subject to the terms set forth in this Agreement.
(b) Closing. The closing of the Offering (the “Closing”) shall occur upon no later than the fifth (5th) trading day following the date on which all of the transaction documents evidencing receipt of acceptable subscriptions equal to at least $3,000,000 have been executed and delivered by the applicable parties thereto, and A Good News CMS Reimbursement Determination Event (as defined below) shall have occurred, and the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, at the offices of the Company or such other location as the parties shall mutually agree; provided, however, in no event shall the Closing take place later than December 31, 2013. The parties hereto understand and agree that at the Closing seventy five (75%) percent of the gross receipts of acceptable subscriptions in this Offering shall be disbursed to the Company and the remainder balance of the twenty five (25%) percent of such gross receipts shall be held at the escrow account at the First Republic Trust Company, a division of First Republic Bank, and shall be disbursed to the Company ten (10) calendar days following the effectiveness of the registration statement to be filed with the Securities and Exchange Committee to register the resale of the shares of the Company’s common stock issuable upon conversion of the Notes and exercise of the Warrants sold hereunder. In the event the Closing does not take place in accordance with the provisions hereof or the sale of the Securities is not consummated by the Company for any reason, this Agreement and any other agreement entered into between the undersigned and the Company relating to the undersigned’s subscription for Securities shall thereafter have no force or effect.
As used herein, the term “A Good News CMS Reimbursement Determination Event” shall be understood to be a final ruling by the Centers for Medicare & Medicaid Services (“CMS”) in the “CY 2014 Changes to the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (CMS-1601-FC)” resulting in an approved payment rate for AutoloGel of at least $450 per treatment.
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3. Investor’s Representations and Warranties
The undersigned hereby acknowledges, agrees with and represents and warrants to the Company, as follows:
(a) The undersigned has read and fully understand all reports and other filings made by the Company with the Securities and Exchange Commission (the “SEC”) that are available through EDGAR at the SEC’s website (www.sec.gov), including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013; June 30, 2013; and September 30, 2013, and the Current Reports on Form 8-K dated February 20, 2013, March 15, 2013, April 3, 2013, June 6, 2013, June 11, 2013, September 18, 2013 and October 31, 2013, (and any amendments to any of the foregoing).
(b) The undersigned has full power and authority to enter into and deliver this Agreement and to perform the obligations hereunder, and the execution, delivery and performance of this Agreement has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the undersigned.
(c) The undersigned acknowledges his, her or its understanding that the offering and sale of the Notes, the Warrants and the shares of common stock underlying such Securities (the “Underlying Securities”) is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) of the Securities Act and the provisions of Regulation D promulgated thereunder (“Regulation D”). In furtherance thereof, the undersigned represents and warrants to the Company as follows:
(i) The undersigned realizes that the basis for the exemption from registration may not be available if, notwithstanding the undersigned’s representations contained herein, the undersigned is merely acquiring the Securities for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. The undersigned does not have any such intention.
(ii) The undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and not with view to, or resale in connection with, any distribution of the Securities.
(iii) The undersigned has the financial ability to bear the economic risk of his, her or its investment, has adequate means for providing for its current needs and contingencies, and has no need for liquidity with respect to the investment in the Company.
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(iv) The undersigned and the undersigned’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, “Advisors”), have received, carefully reviewed and understand the information contained in various documents and agreements provided by the Company, together with all appendices and exhibits thereto (as such documents may be amended or supplemented, the “Transaction Documents”), relating to the Offering.
(v) The undersigned (together with his, her or its Advisors, if any) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Securities. If other than an individual, the undersigned also represents it has not been organized solely for the purpose of acquiring the Securities.
(d) The information in the Confidential Investor Questionnaire attached hereto as Exhibit A and completed and executed by the undersigned is true and accurate in all respects, and the undersigned is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D.
(e) The undersigned is not relying on the Company or its affiliates or agents with respect to economic considerations involved in this investment. The undersigned has relied on the advice of, or has consulted with, only his, her or its Advisors. Each Advisor, if any, is capable of evaluating the merits and risks of an investment in the Securities, and each Advisor, if any, has disclosed to the undersigned in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor or any affiliate or sub-agent thereof.
(f) The undersigned represents, warrants and agrees that he, she or it will not sell or otherwise transfer the Securities without registration under the Securities Act or an exemption therefrom, and fully understands and agrees that the undersigned must bear the economic risk of his, her or its purchase because, among other reasons, the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states, or an exemption from such registration is available. In particular, the undersigned is aware that the Securities (including the Underlying Securities) are “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The undersigned also understands that, except as otherwise provided in Section 4 hereof, the Company is under no obligation to register the Securities on his, her or its behalf or to assist them in complying with any exemption from registration under the Securities Act or applicable state securities laws. The undersigned understands that any sales or transfers of the Securities are further restricted by state securities laws and the provisions of this Agreement.
(g) The undersigned understands and agrees that the certificates for the Securities shall bear substantially the following legend until (i) the Securities (including the Underlying Securities) shall have been registered under the Securities Act and effectively disposed of in accordance with a registration statement that has been declared effective or (ii) in the opinion of counsel for the Company, the Securities (including the Underlying Securities) may be sold without registration under the Securities Act, as well as any applicable “blue sky” or state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
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(h) No representations or warranties have been made to the undersigned by the Company or any of its respective officers, employees, counsel, agents, sub-agents, affiliates or subsidiaries, other than any representations of the Company contained in the transaction agreements in connection with the Offering, and in subscribing for the Securities the undersigned is not relying upon any representations other than those contained in the transaction agreements in connection with the Offering.
(i) The undersigned understands and acknowledges that his, her or its purchase of the Securities is a speculative investment that involves a high degree of risk and the potential loss of the undersigned’s entire investment and has carefully read and considered the matters set forth in the agreements in connection with the Offering, and, in particular, acknowledges that the Company has a limited operating history.
(j) The undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to the undersigned’s net worth, and an investment in the Securities will not cause such overall commitment to become excessive.
(k) Neither the SEC nor any state securities commission has approved the Underlying Securities or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy of the in the agreements in connection with the Offering. The agreements in connection with the Offering have not been reviewed by any federal, state or other regulatory authority. Any representation to the contrary is a crime.
(l) The undersigned and his, her or its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the offering of the Securities and the business, financial condition, results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the undersigned and his, her or its Advisors, if any.
(m) The undersigned is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, in connection with the offering and sale of the Securities and is not subscribing for Securities and did not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the undersigned was invited by, or any solicitation of a subscription by, a person not previously known to the undersigned in connection with investments in securities generally.
(n) The undersigned has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating to this Agreement or the transactions contemplated hereby (other than commissions to be paid by the Company to BTIG, LLC (the “Placement Agent”) pursuant to the terms of the September 6, 2013 engagement letter by the Company and the Placement Agent which engagement contemplates the following compensation, among other things: (i) an eight (8%) percent cash commission on the gross proceeds of this Offering, (ii) a warrant to acquire shares of the Company’s common stock which number of shares shall be equivalent to three (3%) percent of the total common-equivalent shares sold in this Offering on the terms and provisions substantially similar to the Warrants, including the same registration rights, and (iii) plus certain out of pocket expenses and legal fees.
(o) The undersigned is not relying on the Company or any of its respective employees, agents or sub-agents with respect to the legal, tax, economic and related considerations of an investment in the Securities, and the undersigned has relied on the advice of, or has consulted with, only his, her or its own Advisors.
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(p) The undersigned acknowledges that any estimates or forward-looking statements or projections included in the Transaction Documents were prepared by the future management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Company or its respective management and should not be relied upon.
(q) No oral or written representations have been made, or oral or written information furnished, to the undersigned or his, her or its Advisors, if any, in connection with the offering of the Securities which are in any way inconsistent with the information contained in the agreements in connection with the Offering.
(r) (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The subscriber or Plan fiduciary (a) is responsible for the decision to invest in the Company; (b) is independent of the Company and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the subscriber or Plan fiduciary has not relied primarily on any advice or recommendation of the Company or any of its affiliates or its agents.
4. Registration Rights
The undersigned shall have registration rights with respect to the Securities issued and held of record by the undersigned and the shares of common stock underlying such Securities, as set forth in greater detail in the Registration Rights Agreement (the “Registration Rights Agreement”) attached hereto as Exhibit B.
5. Insider Trading Prohibition
Until the filing by the Company of a Current Report on Form 8-K (which filing with the SEC shall be made within four (4) business days of the date on the signature page of this Agreement) describing, among other things, the Offering, the undersigned hereby agrees to refrain from (A) engaging in any transactions with respect to the capital stock of the Company or securities exercisable or convertible into or exchangeable for any shares of capital stock of the Company, and (B) entering into any transaction which would have the same effect, or entering into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the capital stock of the Company.
6. Reserved.
7. Notices to Subscribers
(a) THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTATION. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
(b) IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THE OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE MADE AWARE THAT THEY ARE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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(c) THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN ANY PARTICULAR STATE. THE OFFERING DOCUMENTS MAY BE SUPPLEMENTED BY ADDITIONAL STATE LEGENDS. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE ADVISED TO CONTACT THE COMPANY FOR A CURRENT LIST OF STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY MADE. AN INVESTMENT IN THIS OFFERING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF FINANCIAL RISK. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSIDER ALL OF THE RISK FACTORS DESCRIBED HEREIN.
(d) THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS OFFERING HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF THE SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25000, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
(e) FOR FLORIDA RESIDENTS ONLY. EACH INVESTOR HAS THE RIGHT TO CANCEL AND WITHDRAW HIS SUBSCRIPTION AGREEMENT AND HIS PURCHASE OF INTERESTS UPON WRITTEN NOTICE TO THE FUND GIVEN WITHIN THREE BUSINESS DAYS FOLLOWING THE LATER OF THE MAKING OF THE FIRST PAYMENT BY THE INVESTOR FOR THE SECURITIES PURCHASED OR THE COMMUNICATION OF THE AVAILABILITY OF SUCH PRIVILEGE TO THE INVESTOR. UPON SUCH CANCELLATION OR WITHDRAWAL, THE INVESTOR WILL HAVE NO OBLIGATION OR DUTY TO THE FUND OR TO ANY OTHER PERSON, AND WILL BE ENTITLED TO THE FULL RETURN OF ANY AMOUNTS PAID BY HIM OR HER PURSUANT TO HIS OR HER SUBSCRIPTION AGREEMENT. ANY NOTICE OF CANCELLATION OR WITHDRAWAL SHOULD BE MADE BY CERTIFIED OR REGISTERED MAIL, AND WILL BE EFFECTIVE UPON DEPOSIT IN THE UNITED STATES MAIL, POSTAGE OR OTHER TRANSMITTAL FEES PAID.
8. Right of Participation.
Subject to the terms and conditions contained herein, the Company hereby grants to the investors in this Offering, as a group (such that no individual investor in this Offering shall have the right of participation contemplated by this provision qua an individual investor), a right of participation in the amount of up to thirty five percent (35%) of the gross amount raised in a Subsequent Offering (as defined herein) with respect to future sales by the Company of its equity securities to third party investors (each a “Subsequent Financing”). The right of participation under this Section shall terminate and be of no further force or effect on the ninth (9th) month anniversary of the Closing. Each time the Company proposes to offer any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock, in any Subsequent Financing, the Company shall, at least five (5) business days prior to the closing of a Subsequent Financing, deliver to the undersigned a written notice of its intention to effect a Subsequent Financing, which notice shall ask the investors in this Offering if they want to review the details of such financing. Such notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the person or persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. If the undersigned desires to participate in such Subsequent Financing, it must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fifth (5th) business after all of the holders of the Notes have received such notices that the undersigned is willing to participate in the Subsequent Financing, the amount of participation up to the pro rata percentage and representing and warranting that the undersigned has such funds ready, willing, and available for investment on the terms set forth in the Notice. If the Company receives no such notice from the undersigned as of 5:30 P.M. (New York City time) on such fifth (5th) business day, the undersigned shall be deemed to have notified the Company that it does not elect to participate.
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9. Miscellaneous Provisions
(a) Confidential Information. The subscriber agrees that no portion of the Confidential Information (as defined below) shall be disclosed to third parties, except as may be required by law, without the prior express written consent of the Company; provided, however, that the subscriber may share such information with such of its officers and professional advisors as may need to know such information to assist the subscriber in its evaluation thereof on the condition that such parties agree to be bound by the terms hereof. “Confidential Information” means the existence and terms of this Agreement, the transactions contemplated hereby, and the disclosures and other information contained herein or in the agreements in connection with the Offering, excluding any disclosures or other information that are publicly available.
(b) Modification. Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, modification, discharge or termination is sought.
(c) Survival. The undersigned’s representations and warranties made in this Agreement shall survive the execution and delivery of this Agreement and the delivery of the Securities.
(d) Notices. Any party may send any notice, request, demand, claim or other communication hereunder to the undersigned at the address set forth on the signature page of this Agreement or to the Company at the address set forth above using any means (including personal delivery, expedited courier, messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written notice in the manner herein set forth.
(e) Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the undersigned is more than one person or entity, the obligation of the undersigned shall be joint and several and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity and his or its heirs, executors, administrators, successors, legal representatives and permitted assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them, as to the subject matter hereof.
(f) Assignability. This Agreement is not transferable or assignable by the undersigned.
(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflicts of law principles; provided, however, in the event that any legal proceeding is brought against the Maryland Venture Fund (Department of Business and Economic Development of the State of Maryland (hereinafter referred to as the “DBED”), or the State of Maryland in connection with such entity’s investment hereunder, the parties to any such dispute agree to submit to the venue of the Maryland courts for purposes of resolving any and all such disputes.
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(h) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(i) Further Assurances. Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any governmental authority or any other person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.
(j) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.
[Remainder of page left intentionally blank - signature pages follow]
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ALL SUBSCRIBERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the ___ day of _______ 2013.
| ________________________ | x $____ for each _____ | = $_____________________ |
| Securities subscribed for | Aggregate Purchase Price |
Manner in which title is to be held (please check one):
| 1. | ___ | Individual | 7. | ___ |
Trust/Estate/Pension or Profit sharing Plan Date Opened:______________ | ||
| 2. | ___ | Joint Tenants with Right of Survivorship | 8. | ___ |
As a Custodian for ________________________________ Under the Uniform Gift to Minors Act of the State of ________________________________ | ||
| 3. | ___ | Community Property | 9. | ___ | Married with Separate Property | ||
| 4. | ___ | Tenants in Common | 10. | ___ | Keogh | ||
| 5. | ___ | Corporation/Partnership/ Limited Liability Company | 11. | ___ | Tenants by the Entirety | ||
| 6. | ___ | IRA |
IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE 11.
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 12.
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EXECUTION BY NATURAL PERSONS
_____________________________________________________________________________ Exact Name in Which Title is to be Held | ||||
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Name (Please Print) |
Name of Additional Purchaser |
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Residence: Number and Street |
Address of Additional Purchaser |
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City, State and Zip Code |
City, State and Zip Code |
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Social Security Number |
Social Security Number |
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Telephone Number |
Telephone Number |
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Fax Number (if available) |
Fax Number (if available) |
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E-Mail (if available) |
E-Mail (if available) |
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(Signature) |
(Signature of Additional Purchaser) |
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ACCEPTED this __ day of _________ 2013, on behalf of the Company.
| By: | |||
| Name: | |||
| Title: | |||
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EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
(Corporation, Partnership, LLC, Trust, Etc.)
_____________________________________________________________________________ Name of Entity (Please Print) | ||||
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Date of Incorporation or Organization: | ||||
| State of Principal Office: | ||||
| Federal Taxpayer Identification Number: | ||||
| Office Address | ||||
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City, State and Zip Code | ||||
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Telephone Number | ||||
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Fax Number (if available) | ||||
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E-Mail (if available) | ||||
| By: | ||
| Name: | ||
| Title: |
ACCEPTED this __ day of _________ 2013, on behalf of the Company.
| By: | |||
| Name: | |||
| Title: |
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Exhibit A
CONFIDENTIAL INVESTOR QUESTIONNAIRE
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Exhibit B
REGISTRATION RIGHTS AGREEMENT
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Exhibit C
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2013
42717-0000
DC\80701305.6
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FORM REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the “Agreement”) is made and entered into as of this [_] day of [_], 2013 by and between Cytomedix, Inc., a Delaware corporation (the “Company”), and the parties set forth on the signature pages and Exhibit A hereto (each, a “Purchaser” and collectively, the “Purchasers”).
RECITALS
WHEREAS, the Company is offering to accredited investors in a private placement transaction (the “Offering”) in compliance with Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), up consisting of: (i) 10% Subordinated Convertible Promissory Notes (the ”Notes”) and (ii) a warrant to purchase shares of Common Stock (a “Warrant”). Each Warrant shall be exercisable for the number of shares of Common Stock set forth in the Warrant at a price of $[_] per share (each, a “Warrant” and together with the shares underlying the Notes, the “Underlying Securities”) upon the terms and conditions and subject to the provisions hereinafter set forth; and
WHEREAS, each Purchaser, in connection with its intent to purchase Securities in the Offering, has executed and delivered a Subscription Agreement (as hereinafter defined) and a Confidential Investor Questionnaire (the “Investor Questionnaire”) memorializing such Purchaser’s agreement to purchase and the Company’s agreement to sell the number of Securities set forth therein at the Purchase Price, and this Agreement, pursuant to which the Company will provide certain registration rights related to the Underlying Securities on the terms set forth herein (the Subscription Agreement, Investor Questionnaire and this Agreement are collectively referred to as the “Transaction Documents”).
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth herein, the parties mutually agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:
“Aggregate Purchase Price” means the purchase price set forth in the Subscription Agreement.
“Approved Market” means the NASD Over-The-Counter Bulletin Board, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock Exchange, Inc. or the NYSE Mkt LLC.
“Blackout Period” means, with respect to a registration, a period, in each case commencing on the day immediately after the Company notifies the Purchasers that they are required, because of the occurrence of an event of the kind described in Section 4(f) hereof, to suspend offers and sales of Registrable Securities during which the Company, in the good faith judgment of its board of directors, determines (because of the existence of, or in anticipation of, any acquisition, financing activity, or other transaction involving the Company, or the unavailability for reasons beyond the Company's control of any required financial statements, disclosure of information which is in its best interest not to publicly disclose, or any other event or condition of similar significance to the Company) that the registration and distribution of the Registrable Securities to be covered by such registration statement, if any, would be seriously detrimental to the Company and its stockholders and ending on the earlier of (1) the date upon which the material non-public information commencing the Blackout Period is disclosed to the public or ceases to be material and (2) such time as the Company notifies the selling Holders that the Company will no longer delay such filing of the Registration Statement, recommence taking steps to make such Registration Statement effective, or allow sales pursuant to such Registration Statement to resume; provided, however, that (a) the Company shall limit its use of Blackout Periods, in the aggregate, to 30 Trading Days in any 12-month period and (b) no Blackout Period may commence sooner than 60 days after the end of a prior Blackout Period.
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“Business Day” means any day of the year, other than a Saturday, Sunday, or other day on which the Commission is required or authorized to close.
“Closing Date” means the date of the Closing of the Offering, as determined by the Company and the Purchasers.
“Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
“Common Stock” means the common stock of the Company and any and all shares of capital stock or other equity securities of: (i) the Company which are added to or exchanged or substituted for the Common Stock by reason of the declaration of any stock dividend or stock split, the issuance of any distribution or the reclassification, readjustment, recapitalization or other such modification of the capital structure of the Company; and (ii) any other corporation, now or hereafter organized under the laws of any state or other governmental authority, with which the Company is merged, which results from any consolidation or reorganization to which the Company is a party, or to which is sold all or substantially all of the shares or assets of the Company, if immediately after such merger, consolidation, reorganization or sale, the Company or the stockholders of the Company own equity securities having in the aggregate more than 50% of the total voting power of such other corporation.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Family Member” means (a) with respect to any individual, such individual's spouse, any descendants (whether natural or adopted), any trust all of the beneficial interests of which are owned by any of such individuals or by any of such individuals together with any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any such individual, and any corporation, association, partnership or limited liability company all of the equity interests of which are owned by those above described individuals, trusts or organizations and (b) with respect to any trust, the owners of the beneficial interests of such trust.
“Holder” means each Purchaser or any of such Purchaser's respective successors and Permitted Assignees who acquire rights in accordance with this Agreement with respect to the Registrable Securities directly or indirectly from a Purchaser or from any Permitted Assignee.
“Investor Questionnaire” has the meaning set forth in the Recitals of this Agreement.
“Majority Holders” means at any time Holders representing a majority of the Registrable Securities.
“Offering” has the meaning set forth in the Recitals of this Agreement.
“Permitted Assignee” means (a) with respect to a partnership, its partners or former partners in accordance with their partnership interests, (b) with respect to a corporation, its stockholders in accordance with their interest in the corporation, (c) with respect to a limited liability company, its members or former members in accordance with their interest in the limited liability company, (d) with respect to an individual party, any Family Member of such party, (e) an entity that is controlled by, controls, or is under common control with a transferor or (f) a party to this Agreement.
“Purchased Securities” has the meaning set forth in the Recitals of this Agreement.
The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.
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“Registrable Securities” means the shares of Common Stock issued or issuable from time to time upon the conversion of the Notes, the shares of Common Stock issued or issuable from time to time upon the exercise of the Warrants, and the shares of Common Stock issued or issuable from time to time upon the exercise of the warrants issued to the placement agent for the Offering, but excluding (i) any Registrable Securities that have been publicly sold or may be sold immediately without registration under the Securities Act either pursuant to Rule 144 of the Securities Act or otherwise; (ii) any Registrable Securities sold by a person in a transaction pursuant to a registration statement filed under the Securities Act or (iii) any Registrable Securities that are at the time subject to an effective registration statement under the Securities Act.
“Registration Default Date” means the date that is ninety (90) days following the Closing Date (as the term is defined in the Subscription Agreement) or one hundred fifty (150) days following the Closing Date in the event that the Registration Statement is reviewed by the Commission.
“Registration Default Period” means the period following the Registration Default Date during which any Registration Event occurs and is continuing.
“Registration Event” means the occurrence of any of the following events:
(a) the Company fails to file with the Commission the Registration Statement on or before the Registration Filing Date;
(b) the Registration Statement is not declared effective by the Commission on or before the Registration Default Date; or
(c) after the SEC Effective Date, sales cannot be made pursuant to the Registration Statement for any reason (including without limitation by reason of a stop order, or the Company's failure to update the Registration Statement).
“Registration Filing Date” means the date that is thirty (30) days after the Closing.
“Registration Statement” means the registration statement that the Company is required to file pursuant to this Agreement to register the Registrable Securities.
“Rule 144” means Rule 144 promulgated by the Commission under the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute promulgated in replacement thereof, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
“SEC Effective Date” means the date the Registration Statement is declared effective by the Commission.
“Securities” has the meaning set forth in the Recitals of this Agreement.
“Subscription Agreement” means each of the subscriptiona dated as of the date hereof by and between the Company and each of the Purchasers setting forth the terms and conditions of the Offering.
“Trading Day” means any day on which the national securities exchange, the Nasdaq Stock Market, the NYSE Amex LLC, the NASD Over the Counter Bulletin Board or such other securities market or quotation system, which at the time constitutes the principal securities market for the Common Stock, is open for general trading of securities.
“Transaction Documents” has the meaning set forth in the Recitals of this Agreement.
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2. Term. This Agreement shall continue in full force and effect for a period of two (2) years from the Effective Date, unless terminated sooner hereunder.
3. Registration. Not later than the Registration Filing Date, the Company shall file with the Commission a registration statement on Form S-1, or other applicable form, relating to the resale by the Holders of all of the Registrable Securities, and the Company shall use its commercially reasonable best efforts to cause such registration statement to be declared effective prior to the Registration Default Date; provided, however, that the Company shall not be obligated to effect any such registration, qualification, or compliance pursuant to this Section, or keep such registration effective pursuant to the terms hereunder during any Blackout Period, in which case the Registration Filing Date shall be extended to the date immediately following the last day of such Blackout Period.
Prior to the earlier of the SEC Effective Date or the date on which there are no remaining Registrable Securities, the Company will not, without the prior written consent of the Majority Holders, file or request the acceleration of any other registration statement filed with the Commission, and during any time subsequent to the SEC Effective Date when the Registration Statement for any reason is not available for use by any Holder for the resale of any Registrable Securities, the Company shall not, without the prior written consent of the Majority Holders, file any other registration statement or any amendment thereto with the Commission under the Securities Act or request the acceleration of the effectiveness of any other registration statement previously filed with the Commission, other than (i) any registration statement on Form S-8 or Form S-4 and (ii) any registration statement or amendment which the Company is required to file or as to which the Company is required to request acceleration pursuant to any obligation in effect on the date of execution and delivery of this Agreement.
If a Registration Event occurs, then the Company will make payments to each Purchaser (a “Qualified Purchaser”), as partial liquidated damages for the minimum amount of damages to the Qualified Purchaser by reason thereof, and not as a penalty, at a rate equal to 1% of the Aggregate Purchase Price of the Registrable Securities then held by a Qualified Purchaser monthly, for each calendar month of the Registration Default Period (pro rated for any period less than 30 days), up to a maximum, together with all payments made by the Company to such Purchaser pursuant hereto, of 10% of the Aggregate Purchase Price of the Securities purchased by such Purchaser; provided, however, if a Registration Event occurs (or is continuing) on a date more than six months after the Qualified Purchaser acquired the Registrable Securities (and thus the six month holding period under Rule 144(d) has elapsed), liquidated damages shall be paid only with respect to that portion of the Qualified Purchaser's Registrable Securities that cannot then be immediately resold in reliance on Rule 144, assuming for such Warrant exercises the use of such Warrants cashless exercise feature in accordance with the terms of the Warrants. Each such payment shall be due and payable within ten days after the end of each calendar month of the Registration Default Period until the termination of the Registration Default Period and within ten days after such termination. Such payments shall constitute the Qualified Purchaser's exclusive remedy for such events. The Registration Default Period shall terminate upon (i) the filing of the Registration Statement in the case of clause (a) of the definition of Registration Event, (ii) the SEC Effective Date in the case of clause (b) of the definition of Registration Event assuming for such Warrant exercises the use of such Warrants cashless exercise feature in accordance with the terms of the Warrants, (iii) the ability of the Qualified Purchaser to effect sales pursuant to the Registration Statement in the case of clause (c) of the definition of Registration Event, (iv) the listing or inclusion and/or trading of the Common Stock on an Approved Market, as the case may be, in the case of clause (d) of the definition of Registration Event, and (v) in the case of the events described in clauses (b) and (c) of the definition of Registration Event, the earlier termination of the Registration Default Period. The amounts payable as partial liquidated damages pursuant to this paragraph shall be payable (i) in lawful money of the United States or, (ii) at the Company’s sole election, in shares of Common Stock, which such shares shall be issued at the then current market price at the time payment becomes due. Amounts payable as liquidated damages to each Qualified Purchaser hereunder with respect to each share of Registrable Securities shall cease when the Qualified Purchaser no longer holds such shares of Registrable Securities or such shares of Registrable Securities can be immediately sold by the Qualified Purchaser in reliance on Rule 144.
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4. Registration Procedures. The Company will keep each Holder reasonably advised as to the filing and effectiveness of the Registration Statement. At its expense with respect to the Registration Statement, the Company will:
(a) prepare and file with the Commission with respect to the Registrable Securities, a registration statement on Form S-1, or any other form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities in accordance with the intended methods of distribution thereof, and use its commercially reasonable efforts to cause such registration statement to become and remain effective at for a period of nine (9) months or for such shorter period ending on the earlier to occur of (i) the sale of all Registrable Securities and (ii) the availability under Rule 144 for the Holder to sell the Registrable Securities (in either case, the “Effectiveness Period”);
(b) if a registration statement is subject to review by the Commission, promptly respond to all comments and diligently pursue resolution of any comments to the satisfaction of the Commission;
(c) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective during the Effectiveness Period;
(d) furnish, without charge, to each Holder of Registrable Securities covered by such registration statement (i) a reasonable number of copies of such registration statement (including any exhibits thereto other than exhibits incorporated by reference), each amendment and supplement thereto as such Holder may reasonably request, (ii) such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any other prospectus filed under Rule 424 under the Securities Act) as such Holders may reasonably request, in conformity with the requirements of the Securities Act, and (iii) such other documents as such Holder may require to consummate the disposition of the Registrable Securities owned by such Holder, but only during the Effectiveness Period;
(e) use its commercially reasonable best efforts to register or qualify such registration under such other applicable securities or blue sky laws of such jurisdictions as any Holder of Registrable Securities covered by such registration statement reasonably requests and as may be necessary for the marketability of the Registrable Securities (such request to be made by the time the applicable registration statement is deemed effective by the Commission) and do any and all other acts and things necessary to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction;
(f) as promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities, the disposition of which requires delivery of a prospectus relating thereto under the Securities Act, of the happening of any event, which comes to the Company's attention, that will after the occurrence of such event cause the prospectus included in such registration statement, if not amended or supplemented, to contain an untrue statement of a material fact or an omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Company shall promptly thereafter prepare and furnish to such Holder a supplement or amendment to such prospectus (or prepare and file appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, unless suspension of the use of such prospectus otherwise is authorized herein or in the event of a Blackout Period, in which case no supplement or amendment need be furnished (or Exchange Act filing made) until the termination of such suspension or Blackout Period;
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(g) comply, and continue to comply during the Effectiveness Period, in all material respects with the Securities Act and the Exchange Act and with all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such registration statement;
(h) as promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities being offered or sold pursuant to the Registration Statement of the issuance by the Commission of any stop order or other suspension of effectiveness of the Registration Statement;
(i) use its best efforts to cause all the Registrable Securities covered by the Registration Statement to be quoted on the Approved Market on which securities of the same class or series issued by the Company are then listed or traded;
(j) provide a transfer agent and registrar, which may be a single entity, for the shares of Common Stock at all times;
(k) cooperate with the Holders of Registrable Securities being offered pursuant to the Registration Statement to issue and deliver, or cause its transfer agent to issue and deliver, certificates representing Registrable Securities to be offered pursuant to the Registration Statement within a reasonable time after the delivery of certificates representing the Registrable Securities to the transfer agent or the Company, as applicable, and enable such certificates to be in such denominations or amounts as the Holders may reasonably request and registered in such names as the Holders may request;
(l) during the Effectiveness Period, refrain from bidding for or purchasing any Common Stock or any right to purchase Common Stock or attempting to induce any person to purchase any such security or right if such bid, purchase or attempt would in any way limit the right of the Holders to sell Registrable Securities by reason of the limitations set forth in Regulation M under the Exchange Act; and
(m) take all other reasonable actions necessary to expedite and facilitate the disposition by the Holders of the Registrable Securities pursuant to the Registration Statement.
5. Suspension of Offers and Sales. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(f) hereof or of the commencement of an Blackout Period, such Holder shall discontinue the disposition of Registrable Securities included in the Registration Statement until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof or notice of the end of the Blackout Period, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies (including, without limitation, any and all drafts), other than permanent file copies, then in such Holder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
6. Registration Expenses. The Company shall pay all expenses in connection with any registration obligation provided herein, including, without limitation, all registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with securities or blue sky laws, and the fees and disbursements of counsel for the Company and of its independent accountants; provided that, in any underwritten registration, each party shall pay for its own underwriting discounts and commissions and transfer taxes. Except as provided in this Section and Section 9 hereof, the Company shall not be responsible for the expenses of any attorney or other advisor employed by a Holder.
7. Assignment of Rights. No Holder may assign its rights under this Agreement to any party without the prior written consent of the Company; provided, however, that a Holder may assign its rights under this Agreement without such consent to a Permitted Assignee as long as (a) such transfer or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement; and (c) the Company is given written notice by such Holder of such transfer or assignment, stating the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned.
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8. Information by Holder. Holders included in any registration shall furnish to the Company such information as the Company may reasonably request in writing regarding such Holders and the distribution proposed by such Holders.
9. Indemnification.
(a) In the event of the offer and sale of Registrable Securities under the Securities Act, the Company shall, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, its directors, officers, partners, each other person who participates as an underwriter in the offering or sale of such securities, and each other person, if any, who controls or is under common control with such Holder or any such underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses to which the Holder or any such director, officer, partner or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement of any material fact contained in any registration statement prepared and filed by the Company under which shares of Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, and the Company shall reimburse the Holder, and each such director, officer, partner, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided that the Company shall not be liable in any such case (i) to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement in or omission from such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by or on behalf of such Holder specifically stating that it is for use in the preparation thereof or (ii) if the person asserting any such loss, claim, damage, liability (or action or proceeding in respect thereof) who purchased the Registrable Securities that are the subject thereof did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended or supplemented) at or prior to the written confirmation of the sale of such Registrable Securities to such person because of the failure of such Holder or underwriter to so provide such amended preliminary or final prospectus and the untrue statement or omission of a material fact made in such preliminary prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended or supplemented). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holders, or any such director, officer, partner, underwriter or controlling person and shall survive the transfer of such shares by the Holder.
(b) As a condition to including Registrable Securities in any registration statement filed pursuant to this Agreement, each Holder agrees to be bound by the terms of this Section 9 and to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director or officer or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) that arises out of or is based upon an untrue statement in or omission from such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Holder through an instrument duly executed by or on behalf of the Company specifically stating that it is for use in the preparation thereof, and such Holder shall reimburse the Company, and each such director, officer, and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling and such loss, claim, damage, liability, action, or proceeding; provided, however, that such indemnity agreement found in this Section 9 shall in no event exceed the gross proceeds from the offering received by such Holder. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer by any Holder of such shares.
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(c) Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in this Section (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in the reasonable judgment of counsel to such indemnified party a conflict of interest between such indemnified and indemnifying parties may exist or the indemnified party may have defenses not available to the indemnifying party in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim in a diligent manner, other than reasonable costs of investigation. Neither an indemnified nor an indemnifying party shall be liable for any settlement of any action or proceeding effected without its consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth herein, and without limiting any of the rights set forth above, in any event any party shall have the right to retain, at its own expense, counsel with respect to the defense of a claim.
(d) In the event that an indemnifying party does or is not permitted to assume the defense of an action pursuant to Section 9(c) hereof or in the case of the expense reimbursement obligation set forth in Sections 9(a) and (b) hereof, the indemnification required by Sections 9(a) and (b) hereof shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills received or expenses, losses, damages, or liabilities are incurred.
(e) If the indemnification provided for in this Section is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall (i) contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense as is appropriate to reflect the proportionate relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by the indemnifying party or the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount hereinafter calculated, not only the proportionate relative fault of the indemnifying party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.
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(f) Other Indemnification. Indemnification similar to that specified in this Section (with appropriate modifications) shall be given by the Company and each Holder of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.
(g) It is expressly acknowledged and agreed that in accordance with Maryland law, as summarized in Opinion of the Maryland Attorney General No. 86-064 dated December 1, 1986, absent already available appropriations to fund indemnification or contribution obligations that may arise under this Section, any such obligations are conditioned upon the availability of appropriations for use by DBED (as defined below) at the time the indemnification or contribution obligations arise and are further limited to the extent of the State of Maryland's statutory waiver of its sovereign immunity.
10. Rule 144. For a period of at least twelve (12) months following the Closing Date, the Company will use its commercially reasonable best efforts to timely file all reports required to be filed by the Company after the date hereof under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and if the Company is not required to file reports pursuant to such sections, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell shares of Common Stock under Rule 144.
11. Independent Nature of Each Purchaser's Obligations and Rights. The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and each Purchaser shall not be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. Nothing contained herein and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute such Purchasers as a partnership, an association, a joint venture, or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, both substantive and remedial, excluding that body of law relating to conflict of laws; provided, however, in the event that any legal proceeding is brought against the Maryland Venture Fund (Department of Business and Economic Development of the State of Maryland (hereinafter referred to as the “DBED”), or the State of Maryland in connection with such entity’s investment hereunder, the parties to any such dispute agree to submit to the venue of the Maryland courts for purposes of resolving any and all such disputes.
(b) Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, Permitted Assignees, executors and administrators of the parties hereto. In the event the Company merges with, or is otherwise acquired by, a direct or indirect subsidiary of a publicly traded company, the Company shall condition the merger or acquisition on the assumption by such parent company of the Company's obligations under this Agreement.
(c) Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof.
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(d) Notices, etc. All notices or other communications which are required or permitted under this Agreement shall be in writing and sufficient if delivered by hand, by facsimile transmission, by registered or certified mail, postage pre-paid, by electronic mail, or by courier or overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered as of the date so delivered:
if to the Company to:
Cytomedix, Inc.
209 Perry Parkway, Suite 7
Gaithersburg, MD 20877
Attention: Martin Rosendale, CEO
Telephone No.: 240-499-2680
if to the Purchasers:
To each Purchaser at the address set forth on Exhibit A hereto.
or at such other address as any party shall have furnished to the other parties in writing.
(e) Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Agreement, or any waiver on the part of any Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any holder, shall be cumulative and not alternative.
(f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
(g) Severability. In the case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
(h) Amendments. The provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and the Majority Holders. The Purchasers acknowledge that by the operation of this Section, the Majority Holders may have the right and power to diminish or eliminate all rights of the Purchasers under this Agreement.
(i) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exception therefrom is available) in connection with sales of the Registrable Securities pursuant to a Registration Agreement.
[SIGNATURE PAGES FOLLOW]
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This Registration Rights Agreement is hereby executed as of the date first above written.
| Cytomedix, Inc. | |||
| By: | |||
Name: Martin Rosendale |
|||
Title: Chief Executive Officer |
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This Registration Rights Agreement is hereby executed as of the date first above written.
| PURCHASER: | |||
| (PRINT NAME) | |||
| By: | |||
| Name: | |||
| Its: | |||
| 12 |
Exhibit A
Purchasers
| Purchaser Name | Purchaser Address | Number of Securities |
42717-0000
DC\80701302.2
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