Exhibit 10.35
EXECUTION COPY
COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of April 20,
2001, by and between CYTOMEDIX, INC., a Delaware corporation (the "Company"),
and FUSION CAPITAL FUND II, LLC, an Illinois limited liability company (the
"Buyer"). Capitalized terms used herein and not otherwise defined herein are
defined in Section 10 hereof.
WHEREAS:
Subject to the terms and conditions set forth in this Agreement, the
Company wishes to sell to the Buyer, and the Buyer wishes to buy from the
Company, up to Fourteen Million Seven Hundred Thousand Dollars ($14,700,000) of
the Company's common stock, par value $0.0001 per share (the "Common Stock").
The shares of Common Stock to be purchased hereunder are referred to herein as
the "Purchase Shares."
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE OF COMMON STOCK.
Subject to the terms and conditions set forth in Sections 6, 7 and 9 below,
the Company hereby agrees to sell to the Buyer, and the Buyer hereby agrees to
purchase from the Company, shares of Common Stock as follows:
(a) COMMENCEMENT OF PURCHASES OF COMMON STOCK. The purchase and sale of
Common Stock hereunder shall commence (the "Commencement") within five (5)
Trading Days following the date of satisfaction (or waiver) of the conditions to
the Commencement set forth in Sections 6 and 7 below (the date of such
Commencement, the "Commencement Date").
(b) BUYER'S PURCHASE RIGHTS AND OBLIGATIONS. Subject to the Company's
right to suspend purchases under Section 1(d)(ii) hereof, the Buyer shall
purchase shares of Common Stock on each Trading Day during each Monthly Period
equal to the Daily Base Amount at the Purchase Price. The Buyer shall, within
one (1) Trading Day of receipt of Purchase Shares, pay to the Company an amount
equal to the Purchase Amount with respect to such Purchase Shares as full
payment for the purchase of the Purchase Shares so received. The Company shall
not issue any fraction of a share of Common Stock upon any purchase. All shares
of Common Stock (including fractions thereof) issuable upon a purchase under
this Agreement shall be aggregated for purposes of determining whether the
purchase would result in the issuance of a fraction of a share of Common Stock.
If, after the aforementioned aggregation, the issuance would result in the
issuance of a fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up or down to the nearest whole share. All
payments made under this Agreement shall be made in lawful money of the United
States of America by wire transfer of immediately available funds to such
account as the Company may from time to time designate by written notice in
accordance with the provisions of this Agreement. Whenever any amount expressed
to be due by the terms of this Agreement is due on any day which is not a
Trading Day, the same shall instead be due on the next succeeding day which is a
Trading Day.
(c) COMPANY'S RIGHT TO DECREASE OR INCREASE THE DAILY BASE AMOUNT.
(i) COMPANY'S RIGHT TO DECREASE THE DAILY BASE AMOUNT. The Company
shall always have the right at any time to decrease the amount of the Daily
Base Amount by delivering written notice (a "Daily Base Amount Decrease
Notice") to the Buyer which notice shall specify the amount of the new
Daily Base Amount. The decrease in the Daily Base Amount shall become
effective one Trading Day after receipt by the Buyer of the Daily Base
Amount Decrease. Any purchases by the Buyer which have a Purchase Date on
or prior to the first (1st) Trading Day after receipt by the Buyer of a
Daily Base Amount Decrease Notice must be honored by the Company as
otherwise provided herein. The decrease in the Daily Base Amount shall
remain in effect until the Company delivers to the Buyer a Daily Base
Amount Increase Notice (as defined below).
(ii) COMPANY'S RIGHT TO INCREASE DAILY BASE AMOUNT. The Company shall
always have the right at any time to increase amount of the Daily Base
Amount up to the Original Daily Base Amount by delivering written notice to
the Buyer stating the new amount of the Daily Base Amount (a "Daily Base
Amount Increase Notice"). If the Closing Sale Price of the Common Stock on
each of the five (5) consecutive Trading Days immediately prior to a Daily
Base Amount Increase Notice is at least $2.00, the Company shall have the
right to deliver a Daily Base Amount Increase Notice which increases the
amount of the Daily Base Amount to any amount above the Original Daily Base
Amount up to the full remaining balance of the Available Amount. A Daily
Base Amount Increase Notice shall be effective one Trading Day after
receipt by the Buyer. Such increase in the amount of the Daily Base Amount
shall continue in effect until the delivery to the Buyer of a Daily Base
Amount Decrease Notice. Notwithstanding anything to the contrary, if the
Daily Base Amount then in effect is greater than the Original Daily Base
Amount and the Sale Price of the Common Stock during any Trading Day is
less than $2.00, the amount of the Daily Base Amount for such Trading Day
on which the Sale Price of the Common Stock is less than $2.00 and for each
Trading Day thereafter shall be the Original Daily Base Amount or such
lesser amount as specified by the Company in a Daily Base Amount Decrease
Notice. Thereafter, the Company shall again have the right to increase the
amount of the Daily Base Amount to any amount above the Original Daily Base
Amount only if the Closing Sale Price of the Common Stock is at least $2.00
on each of five (5) consecutive Trading Days.
(d) LIMITATIONS ON PURCHASES.
(i) LIMITATION ON BENEFICIAL OWNERSHIP. The Company shall not effect
any purchase under this Agreement and the Buyer shall not have the right to
purchase shares of Common Stock under this Agreement to the extent that
after giving effect to such purchase the Buyer together with its affiliates
would beneficially own in excess of 4.9% of the outstanding shares of the
Common Stock following such purchase. For purposes hereof, the number of
shares of Common Stock beneficially owned by the Buyer and its affiliates
or acquired by the Buyer and its affiliates, as the case may be, shall
include the number of shares of Common Stock issuable in connection with a
purchase under this Agreement with respect to which the determination is
being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (1) a purchase of the remaining Available Amount
which has not been submitted for purchase, and (2) exercise or conversion
of the unexercised or unconverted portion of any other securities of the
Company (including, without limitation, any warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Buyer and its affiliates. If the 4.9%
limitation is ever reached the Company shall have the option to increase
such limitation to 9.9% by delivery of written notice to the Buyer.
Thereafter, if the 9.9% limitation is ever reached this shall not effect or
limit the Buyer's obligation to fund the
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Daily Base Amount as otherwise provided in this Agreement. Specifically, if
the 9.9% limitation is ever reached, each Trading Day thereafter and until
the Buyer beneficially owns less than 9.9% of the outstanding shares of the
Common Stock, the Buyer shall nevertheless pay to the Company the Daily
Base Amount as otherwise provided herein but the Buyer shall not be
entitled to receive (or exercise any indicia of ownership with respect
thereto) the related Purchase Shares therefore until and only to the extent
that the Buyer beneficially owns less than 9.9% of the outstanding shares
of the Common Stock. For purposes of this Section, in determining the
number of outstanding shares of Common Stock the Buyer may rely on the
number of outstanding shares of Common Stock as reflected in (1) the
Company's most recent Form 10-Q or Form 10-K, as the case may be, (2) a
more recent public announcement by the Company or (3) any other written
communication by the Company or its transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the reasonable written or oral
request of the Buyer, the Company shall promptly confirm orally and in
writing to the Buyer the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to any purchases under this Agreement by the
Buyer since the date as of which such number of outstanding shares of
Common Stock was reported. Upon the written or oral request of the Company,
the Buyer shall within one (1) Trading Day confirm orally and in writing to
the Company the number of shares of Common Stock then held by the Buyer and
the number of shares of Common Stock then beneficially owned by the Buyer
and its affiliates. Except as otherwise set forth herein, for purposes of
this Section 1(d)(i), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended.
(ii) COMPANY'S RIGHT TO SUSPEND PURCHASES. The Company may, at any
time, give written notice (a "Purchase Suspension Notice") to the Buyer
suspending purchases by the Buyer under this Agreement. The Purchase
Suspension Notice shall be effective only for purchases which have a
Purchase Date later than one (1) Trading Day after receipt of the Purchase
Suspension Notice by the Buyer. Any purchases by the Buyer which have a
Purchase Date on or prior to the first (1st) Trading Day after receipt by
the Buyer of a Purchase Suspension Notice from the Company must be honored
by the Company as otherwise provided herein. Such purchase suspension shall
continue in effect until a revocation in writing by the Company at its sole
discretion. So long as a Purchase Suspension Notice is in effect, the Buyer
shall not be obligated to purchase any Purchase Shares from the Company
under Section 1 of this Agreement.
(e) RECORDS OF PURCHASES. The Buyer and the Company shall each maintain
records showing the remaining Available Amount at any given time and the dates
and Purchase Amounts for each purchase or shall use such other method,
reasonably satisfactory to the Buyer and the Company.
(f) TAXES. The Company shall pay any and all taxes that may be payable with
respect to the issuance and delivery of any shares of Common Stock to the Buyer
made under of this Agreement.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
The Buyer represents and warrants to the Company that:
(a) INVESTMENT PURPOSE. The Buyer is entering into this Agreement and
acquiring the Purchase Shares, the Warrants and the Warrant Shares (as defined
in Section 4(f) hereof) (the Purchase Shares, the Warrants and the Warrant
Shares are collectively referred to herein as the "Securities"), for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof.
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(b) ACCREDITED INVESTOR STATUS. The Buyer is an "accredited investor" as
that term is defined in Rule 501(a)(3) of Regulation D.
(c) RELIANCE ON EXEMPTIONS. The Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.
(d) INFORMATION. The Buyer has been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been reasonably requested by
the Buyer, including, without limitation, the SEC Documents (as defined in
Section 3(f) hereof). The Buyer understands that its investment in the
Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and other matters related to an investment in the
Securities. Neither such inquiries nor any other due diligence investigations
conducted by the Buyer or its representatives shall modify, amend or affect the
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. The Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.
(e) NO GOVERNMENTAL REVIEW. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(f) TRANSFER OR RESALE. The Buyer understands that except as provided in
Section 4(a) hereof: (i) the Securities have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder or (B) an exemption exists permitting such Securities to
be sold, assigned or transferred without such registration; (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 0000 Xxx) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
(g) VALIDITY; ENFORCEMENT. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
(h) RESIDENCY. The Buyer is a resident of the State of Illinois.
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(i) NO PRIOR SHORT SELLING. The Buyer represents and warrants to the
Company that at no time prior to the date of this Agreement has any of the
Buyer, its agents, associates, representatives or affiliates engaged in or
effected, in any manner whatsoever, directly or indirectly, any (i) "short sale"
(as such term is defined in Rule 3b-3 of the 0000 Xxx) of the Common Stock or
(ii) hedging transaction, which in any case, established in any manner
whatsoever a short or hedged position with respect to the Common Stock or any
other securities of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
(a) ORGANIZATION AND QUALIFICATION. The Company and its "Subsidiaries"
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar equity interests) are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authority to own their
properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing could not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, "Material Adverse Effect" means any material
adverse effect on any of: (i) the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations under the Transaction Documents (as defined
in Section 3(b) hereof). The Company has no Subsidiaries except as set forth on
Schedule 3(a).
(b) AUTHORIZATION; ENFORCEMENT; VALIDITY. (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Warrant and each of the other
agreements to be entered into by the parties hereto on the
Commencement Date and attached hereto as exhibits to this Agreement
(collectively, the "Transaction Documents"), and to issue the
Securities in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and
thereby, including without limitation, the issuance of the Warrants,
the Warrant Shares and the reservation for issuance and the issuance
of the Purchase Shares issuable under this Agreement, have been duly
authorized by the Company's Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or
its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed
and delivered by the Company and (iv) this Agreement constitutes, and
each other Transaction Document upon its execution on behalf of the
Company, shall constitute, the valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally, the enforcement of creditors' rights and
remedies.
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(c) CAPITALIZATION. As of the date hereof, the authorized capital stock of
the Company consists of (i) 40,000,000 shares of Common Stock, of which as of
the date hereof, 10,691,875 shares are issued and outstanding, no shares are
held as treasury shares, 6,000,000 shares are reserved for issuance pursuant to
the Company's stock option plans of which only approximately 3,621,894 shares
remain available and 7,681,857 shares are issuable and reserved for issuance
pursuant to securities (other than stock options issued pursuant to the
Company's stock option plans) exercisable or exchangeable for, or convertible
into, shares of Common Stock and (ii) 10,000,000 shares of Preferred Stock,
$0.0001 par value, of which as of the date hereof the following shares in two
separate classes of Preferred Stock are issued and outstanding: 1,625,000 shares
of Series A 5% Cumulative Preferred Stock with a $1.00 liquidation preference;
and 5,115,000 shares Series B Convertible Stock with a $0.0001 liquidation
preference. Except as disclosed in Schedule 3(c), (i) no shares of the Company's
capital stock are subject to preemptive rights or any other similar rights or
any liens or encumbrances suffered or permitted by the Company, (ii) there are
no outstanding debt securities, (iii) there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of
capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the 1933 Act, (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement. The Company has furnished to the Buyer true and
correct copies of the Company's Certificate of Incorporation, as amended and as
in effect on the date hereof (the "Certificate of Incorporation"), and the
Company's By-laws, as amended and as in effect on the date hereof (the
"By-laws"), and summaries of the terms of all securities convertible into or
exercisable for Common Stock, if any, and copies of any documents containing the
material rights of the holders thereof in respect thereto.
(d) ISSUANCE OF SECURITIES. The issuance of the Warrants has been duly
authorized and, upon issuance in accordance with the terms thereof the Warrant
Shares shall be (i) validly issued, fully paid and non-assessable and (ii) free
from all taxes, liens and charges with respect to the issue thereof. 6,000,000
shares of Common Stock have been duly authorized and reserved for issuance upon
purchase under this Agreement. Upon issuance and payment therefore in accordance
with the terms and conditions of this Agreement, the Purchase Shares shall be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock.
(e) NO CONFLICTS. Except as disclosed in Schedule 3(e), the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase Shares) will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which
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the Company or any of its Subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of the
Principal Market applicable to the Company or any of its Subsidiaries) or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except in the case of conflicts, defaults and violations under
clause (ii), which could not reasonably be expected to result in a Material
Adverse Effect. Except as disclosed in Schedule 3(e), neither the Company nor
its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation, any Certificate of Designation, Preferences and
Rights of any outstanding series of preferred stock of the Company or By-laws or
their organizational charter or by-laws, respectively. Except as disclosed in
Schedule 3(e), neither the Company nor any of its Subsidiaries is in violation
of any term of or is in default under any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations or amendments which could
not reasonably be expected to have a Material Adverse Effect. The business of
the Company and its Subsidiaries is not being conducted, and shall not be
conducted, in violation of any law, ordinance, regulation of any governmental
entity, except for possible violations, the sanctions for which either
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required under the 1933 Act, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof. Except as disclosed in Schedule 3(e), all consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence shall be obtained or effected on or prior to
the Commencement Date. Except as disclosed in Schedule 3(e), the Company is not
and has not been since January 1, 1999, in violation of the listing requirements
of the Principal Market.
(f) SEC DOCUMENTS; FINANCIAL STATEMENTS. Except as disclosed in Schedule
3(f), since January 1, 2000, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). As of their respective dates (except as
they have been correctly amended), the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC (except as they may have
been correctly amended), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. As of their respective dates (except as they
have been correctly amended), the financial statements of the Company included
in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
(g) ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the
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knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company, the Common Stock or any of the Company's Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors in
their capacities as such, which could reasonably be expected to have a Material
Adverse Effect. A description of each action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body which, as of the date of this Agreement, is
pending or threatened in writing against or affecting the Company, the Common
Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, is
set forth in Schedule 3(h).
4. COVENANTS.
(a) FILING OF REGISTRATION STATEMENT. The Company shall within twenty (20)
Trading Days from the date hereof file a registration statement covering the
resale of at 6,000,000 shares of Common Stock. Such registration statement shall
not cover the sale or resale of any other securities except the sale of the
Purchase Shares and the Warrant Shares to be made by the Buyer.
(b) LIMITATION ON SHORT SALES AND HEDGING TRANSACTIONS. The Buyer agrees
that beginning on the date of this Agreement and ending on the date of
termination of this Agreement as provided in Section 11(k), the Buyer and its
agents, representatives and affiliates shall not in any manner whatsoever enter
into or effect, directly or indirectly, any (i) "short sale" (as such term is
defined in Rule 3b-3 of the 0000 Xxx) of the Common Stock or (ii) hedging
transaction, which in any case, establishes in any manner whatsoever a short or
hedged position with respect to the Common Stock or any other securities of the
Company.
(c) ISSUANCE OF WARRANTS/LIMITATION ON SALES OF WARRANT SHARES. At any time
on or prior to the Commencement Date, the Company shall issue to the Buyer stock
purchase warrants (the "Warrants") to purchase 1,189,320 shares of Common Stock
(the "Warrant Shares"). The Buyer agrees that without the prior consent of the
Company, the Buyer shall not transfer, sell or pledge the Warrant Shares until
the earlier of 560 Trading Days (28 Monthly Periods) from the date hereof or
date on which this Agreement has been terminated, provided, however, that such
restrictions shall not apply in connection with any transfers to or among
affiliates (as defined in the Securities Exchange Act of 1934, as amended) so
long as such affiliates are bound by the transfer restrictions set forth in this
Section 4(f).
(d) PURCHASE SHARE TRANSFER RESTRICTIONS. The Buyer agrees that without the
prior consent of the Company, the Buyer shall not transfer, sell or pledge any
Purchase Shares for 120 Trading Days from the date of issuance thereof,
provided, however, that such restrictions shall not apply in connection with any
transfers to or among affiliates (as defined in the Securities Exchange Act of
1934, as amended) so long as such affiliates are bound by the transfer
restrictions set forth in this Section 4(f).
(e) DUE DILIGENCE. The Buyer shall have the right, from time to time as the
Buyer may reasonably deem appropriate, to perform reasonable due diligence on
the Company during normal business hours. The Company and its officers and
employees shall reasonably cooperate with the Buyer in connection with any
reasonable request by the Buyer related to the Buyer's due diligence of the
Company.
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5. LEGEND REGARDING TRANSFER RESTRICTIONS.
At the discretion of the Company, any of the Purchase Shares and/or Warrant
Shares to be issued under this Agreement or the Warrants may be issued with a
restrictive legend including with respect to any transfer restrictions under
applicable federal and state securities law and the transfer restriction set
forth in Section 4(d) hereof with respect to the Purchase Shares or in Section
4(c) hereof with respect to the Warrant Shares. Such legend shall be in form and
substance as reasonably determined by the Company.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO COMMENCE SALES OF SHARES OF
COMMON STOCK.
The obligation of the Company hereunder to commence sales of the Purchase
Shares is subject to the satisfaction of each of the following conditions on or
before the Commencement Date (the date that sales to the Buyer under this
Agreement begin) and once such conditions have initially been satisfied, there
shall not be any ongoing obligation to satisfy such conditions after the
Commencement has occurred; provided that these conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole discretion
by providing the Buyer with prior written notice thereof:
(a) A registration statement covering the sale of at least 6,000,000 shares
of Common Stock shall have been declared effective under the 1933 Act by the SEC
and no stop order with respect to the registration statement shall be pending or
threatened by the SEC.
(b) The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the
Commencement Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer at or prior to the Commencement Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO COMMENCE PURCHASES OF SHARES
OF COMMON STOCK.
The obligation of the Buyer to commence purchases of Purchase Shares under
this Agreement is subject to the satisfaction of each of the following
conditions on or before the Commencement Date (the date that sales to the Buyer
under this Agreement begin) and once such conditions have initially been
satisfied, there shall not be any ongoing obligation to satisfy such conditions
after the Commencement has occurred; provided that these conditions are for the
Buyer's sole benefit and may be waived by the Buyer at any time in its sole
discretion by providing the Company with prior written notice thereof:
(a) A registration statement covering the sale of at least 6,000,000 shares
of Common Stock shall have been declared effective under the 1933 Act by the SEC
and no stop order with respect to the registration statement shall be pending or
threatened by the SEC.
(b) The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of the
Commencement Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied with the covenants, agreements and conditions
required by the
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Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Commencement Date.
8. INDEMNIFICATION.
In consideration of the Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, shareholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, other than with respect to Indemnified
Liabilities which directly and primarily result from the gross negligence or
willful misconduct of the Indemnitee. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.
9. EVENTS OF DEFAULT.
An "Event of Default" shall be deemed to have occurred at any time as any
of the following events occurs:
(a) while any registration statement is required to be maintained effective
for the resale of the Purchase Shares, the effectiveness of such registration
statement lapses for any reason (including, without limitation, the issuance of
a stop order) or is unavailable to the Buyer for resale of the Purchase Shares
or Warrant Shares, and such lapse or unavailability continues for a period of
thirty (30) consecutive Trading Days;
(b) the suspension from trading or failure of the Common Stock to be listed
on the Principal Market for a period of thirty (30) consecutive Trading Days;
(c) the failure of the Company or the Common Stock to fully meet the
requirements for continued listing on the Principal Market for a period of
thirty (30) consecutive Trading Days;
(d) the failure for any reason by the Company's transfer agent to issue
Purchase Shares to the Buyer within ten (10) Trading Days after the applicable
Purchase Date which the Buyer is entitled to receive under this Agreement;
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(e) Xxxxx X. Cour for any reason ceases to be Chief Executive Officer and a
Director of the Company.
(f) if any Person commences a proceeding against the Company pursuant to or
within the meaning of any Bankruptcy Law;
(g) if the Company pursuant to or within the meaning of any Bankruptcy Law;
(A) commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, (E) becomes insolvent, or
(F) is generally unable to pay its debts as the same become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.
In addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, the Buyer shall not be obligated to purchase any
shares of Common Stock under this Agreement. If pursuant to or within the
meaning of any Bankruptcy Law, the Company commences a voluntary case or any
Person commences a proceeding against the Company, a Custodian is appointed for
the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, (any of which would
be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this
Agreement shall automatically terminate without any liability or payment to the
Company without further action or notice by any Person. No such termination of
this Agreement under Section 11(k)(i) shall affect the Company's or the Buyer's
obligations under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect
to any pending purchases under this Agreement.
10. CERTAIN DEFINED TERMS.
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "Available Amount" means initially Fourteen Million Seven Hundred
Thousand Dollars ($14,700,000) in the aggregate which amount shall be reduced by
the Purchase Amount each time the Buyer purchases shares of Common Stock
pursuant to Section 1 hereof.
(c) "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
(d) "Closing Sale Price" means, for any security as of any date, the last
closing trade price for such security on the Principal Market as reported by
Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing trade price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.
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(e) "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
(f) "Daily Base Amount" means initially Twenty Six Thousand Two Hundred
Fifty Dollars ($26,250) per Trading Day, which amount may be increased or
decreased from time to time pursuant to Section 1(c) hereof.)
(g) "Maturity Date" means the date that is 560 Trading Days (28 Monthly
Periods) from the Commencement Date which such date may be extended by up to an
additional six (6) Monthly Periods by the Company, in its sole discretion, by
written notice to the Buyer.
(h) "Monthly Base Amount" means Five Hundred Twenty Five Thousand Dollars
($525,000) per Monthly Period.
(i) "Monthly Period" means each successive 20 Trading Day period commencing
with the Commencement Date.
(j) "Original Daily Base Amount" means Twenty Six Thousand Two Hundred
Fifty Dollars ($26,250) per Trading Day.
(k) "Person" means an individual or entity including any limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.
(l) "Principal Market" means The Nasdaq OTC/Bulletin Board market,
provided, however, that (i) in the event the Company's Common Stock is ever
listed for trading on the Nasdaq National Market, Nasdaq SmallCap Market or the
American Stock Exchange, than the "Principal Market" shall mean such other
market on which the Company's Common Stock is then listed, and (ii) for purposes
of Section 9(c) hereof only, "Principal Market" shall mean The Nasdaq SmallCap
Market in respect of the requirements for continued listing on the Principal
Market.
(m) "Purchase Amount" means the portion of the Available Amount to be
purchased by the Buyer pursuant to Section 1 hereof.
(n) "Purchase Date" means the actual date that the Buyer is to buy Purchase
Shares pursuant to Section 1 hereof.
(o) "Purchase Price" means as of any Purchase Date, the lower of the (A)
the lowest Sale Price of the Common Stock on the Purchase Date or such other
date of determination or and (B) the arithmetic average of the two (2) lowest
Closing Sale Prices for the Common Stock during the twelve (12) consecutive
Trading Days ending on the Trading Day immediately preceding such Purchase Date
or other date of determination (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction).
(p) "Sale Price" means, for any security as of any date, the trade price
for such security on the Principal Market as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for
such security, the trade price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg.
(q) "SEC" means the United States Securities and Exchange Commission.
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(r) "Trading Day" means any day on which the Principal Market is open for
customary trading.
11. MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of the
State of Delaware shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the other
Transaction Documents shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Trading Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If to the Company:
Cytomedix, Inc.
Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxx X. Cour
If to the Buyer:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
If to the Transfer Agent:
StockTrans, Inc.-
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxx Xxxxxx
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Buyer, including by merger or
consolidation. The Buyer may not assign its rights or obligations under this
Agreement.
(g) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
(h) FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(i) TERMINATION. This Agreement may be terminated only as follows:
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(i) By the Buyer any time an Event of Default exists without any
liability or payment to the Company. However, if pursuant to or within the
meaning of any Bankruptcy Law, the Company commences a voluntary case or
any Person commences a proceeding against the Company, a Custodian is
appointed for the Company or for all or substantially all of its property,
or the Company makes a general assignment for the benefit of its creditors,
(any of which would be an Event of Default as described in Sections 9(f),
9(g) and 9(h) hereof) this Agreement shall automatically terminate without
any liability or payment to the Company without further action or notice by
any Person. No such termination of this Agreement under this Section
11(k)(i) shall affect the Company's or the Buyer's obligations under this
Agreement with respect to pending purchases and the Company and the Buyer
shall complete their respective obligations with respect to any pending
purchases under this Agreement.
(ii) The Company shall have the right to terminate this Agreement for
any reason or for no reason at any time by delivering written notice (a
"Company Termination Notice") to the Buyer electing to terminate this
Agreement without any liability of any party to any other party. The
Company Termination Notice shall not be effective until one (1) Trading Day
after it has been received by the Buyer.
(iii) In the event that the Commencement shall not have occurred on or
before September 30, 2001, due to the failure to satisfy the conditions set
forth in Section 7 above with respect to the Commencement, the Buyer shall
have the option to terminate this Agreement at the close of business on
such date or thereafter without liability of any party to any other party.
(iv) If by the Maturity Date (including any extension thereof by the
Company pursuant to Section 10(g) hereof), for any reason or for no reason
the full Available Amount under this Agreement has not been purchased as
provided for in Section 1 of this Agreement, by the Buyer without any
liability or payment to the Company.
(v) This Agreement shall automatically terminate on the date that the
Company sells and the Buyer purchases Fourteen Million Seven Hundred
Thousand Dollars ($14,700,000) of Common Stock as provided herein, without
any action or notice on the part of any party.
Except as set forth in Sections 11(i)(i) and 11(i)(v), any termination of
this Agreement pursuant to this Section 11(i) shall be effected by written
notice from the Company to the Buyer, or the Buyer to the Company, as the case
may be, setting forth the basis for the termination hereof. The representations
and warranties of the Company and the Buyer contained in Sections 2 and 3
hereof, the indemnification provisions set forth in Section 8 hereof and the
agreements and covenants set forth in Section 11, shall survive the Commencement
and any termination of this Agreement. No termination of this Agreement shall
effect the Company's or the Buyer's obligations under this Agreement with
respect to pending purchases and the Company and the Buyer shall complete their
respective obligations with respect to any pending purchases under this
Agreement.
(j) NO STRICT CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
(k) CHANGES TO THE TERMS OF THIS AGREEMENT. This Agreement and any
provision hereof may only be amended by an instrument in writing signed by the
Company and the Buyer. The term "Agreement" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.
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(l) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.
* * * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock
Purchase Agreement to be duly executed as of the date first written above.
THE COMPANY:
CYTOMEDIX, INC.
By: /s/ Xxxxx X. Cour
Name: Xxxxx X. Cour
Title: President and Chief Executive Officer
BUYER:
FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS, LLC
BY: SGM HOLDINGS CORP.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
-17-
EXHIBIT A
Form of Warrant
SCHEDULES
Schedule 3(a) Subsidiaries
Schedule 3(c) Capitalization
Schedule 3(e) Conflicts
Schedule 3(f) 1934 Act Filings
Schedule 3(g) Litigation
