Exhibit 10.24
SELLING AGENT AGREEMENT
THIS SELLING AGENT AGREEMENT (the "Agreement") is made and entered into
this 12th day of June, 2002, by and between CYTOMEDIX, INC., a Delaware
corporation (the "Issuer") and Xxxxxxxxx & Company, Inc. (the "Agent").
RECITALS
WHEREAS, the Issuer desires to offer and sell up to 5,000,000 shares of
common stock of the issuer and up to 2,000,000 Warrants to purchase shares of
common stock (the "Securities"), at an aggregate price equal to $5,000,000 to
investors in a private offering (the "Offering");
WHEREAS, the Offering will be made pursuant to exemptions from
registration provided by Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act") and Rule 506 of Regulation D promulgated thereunder;
WHEREAS, the Offering will be made pursuant to an Amended Confidential
Offering Memorandum dated May 31, 2002 (the "Memorandum");
WHEREAS, the Issuer desires to obtain the services of an agent to
assist it in the offering and sale of the Securities; and
WHEREAS, the Agent is a member of the National Association of
Securities Dealers, Inc. and is willing, as an agent, to assist the Issuer in
the offer and sale of the Securities on the terms and conditions set forth
herein.
NOW, THEREFORE, for and in consideration of the foregoing, and of the
mutual covenants, agreements, undertakings, representations, and warranties
contained herein, the parties hereto agree as follows:
1. Appointment of Agent to Sell Securities. The Issuer hereby appoints
the Agent as its non-exclusive agent for the period of the Offering to sell up
to $5,000,000 of Securities of the Issuer.
2. Acceptance of Appointment; Agreement to Use Best Efforts to Sell
Securities. The Agent hereby accepts the appointment, and agrees, as agent for
the Issuer, to use its best efforts to find purchasers for the Securities. The
Agent makes no commitment to purchase all or any of the Securities.
3. Other Agents. The Issuer retains the right to employ other agents
for and in connection with the sale of the Securities.
4. Terms of Sale. The Securities shall be sold in minimum offering
amounts of $12,500 per investor.
5. Termination of Offering. The Offering shall terminate upon the
happening of the earlier of (i) the sale of securities totaling $5,000,000
(Maximum Offering Amount"), or (ii) the termination of the Offering by the
Issuer upon obtaining subscriptions evidencing sales of at least $3,000,000
("Minimum Aggregate Offering Amount") but not the Maximum Offering Amount, or
(iii) the withdrawal and/or cancellation of the Offering by the Issuer, in its
sole and absolute discretion, at any time. Upon the termination of the Offering,
the Agent immediately shall cease making offers of the Securities and shall
terminate all then pending offers.
6. Commission. As compensation for its activities hereunder and
pursuant hereto, the Agent shall be paid a commission equal to ten percent (10%)
of the price at which the Securities are sold to investors. The Agent shall be
entitled to receive all of the sales commission in the form of common stock of
the Issuer priced at a price equal to the administrative rate of $1.00 per
share, or the Agent may elect to receive up to 50% of the earned commission in
cash and the remainder of the commission in shares of common stock at the rate
stated herein. The Agent shall receive the commission only after the proceeds of
a sale have been released to the Isssuer.
7. Escrow of proceeds. Any and all proceeds received by the Agent from
the sale of the Securities must be forwarded to the Escrow Account maintained at
Metropolitan National Bank, ABA #000000000, Account #211168 F/B/O Cytomedix,
Inc., to be held pending the raise of the Minimum Offering Amount and
confirmation of the plan of reorganization by the Bankruptcy Court
("Confirmation").
8. Minimum sale; release of proceeds from escrow. Once the Offering has
terminated in accordance with section 5 of this Agreement, the Issuer shall
notify the Agent in writing that the Offering is terminated. If the Minimum
Aggregate Offering Amount has not been subscribed prior to the termination of
the Offering, this Agreement shall terminate, and neither party to this
Agreement shall have any further obligations or responsibilities to the other
hereunder. All funds shall be released from the Escrow Account and returned to
investors, and the Agent shall not be entitled to receive any commission or
other compensation from the Issuer or otherwise. The Issuer shall pay to the
Agent commission relating to a particular sale when the net proceeds of that
sale are released to the Issuer.
9. Subscription. Each subscriber shall subscribe for the Securities by
completing and executing a subscription agreement in the form attached to the
Amended Confidential Offering Memorandum dated May 31, 2002, and delivering the
completed and executed agreement to the Issuer.
10. Delivery of subscription agreements. All subscription agreements
and questionnaire(s) received by the Agent from subscribers immediately shall be
forwarded by the Agent to the Issuer at Cytomedix, Inc. c/x Xxxxxxxx & Xxxxxxxx
LLP, 000 Xxxxxx Xx., Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx 00000.
11. Acceptance or rejection of subscriptions. The Issuer has the right
to accept or reject any subscription. A sale transaction is consummated only
upon the acceptance of a subscription by the Issuer and full subscription for
the Minimum Offering Amount.
12. Copy of subscription to Agent. Upon the acceptance of a
subscription, the Issuer shall execute the acceptance on the subscription
agreement, and shall forward a duplicate of the accepted subscription agreement
to the subscriber with a copy to the Agent.
13. Representations and warranties of the Issuer. The Issuer represents
and warrants to, and agrees with, the Agent that:
(a) The Issuer is a corporation duly organized under the laws
of the State of Delaware with power and authority to own its properties and to
conduct its business as described in the Memorandum.
(b) Upon Confirmation, the Issuer anticipates an outstanding
capitalization as set forth in the Disclosure Statement to the Plan of
Reorganization. The Securities, when issued and delivered, shall be duly and
validly issued, fully paid and non-assessable, and shall conform to the
descriptions contained in the Memorandum and exhibits thereto.
(c) The Memorandum does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated or
necessary to make the statements in the Memorandum not misleading, except that
this representation and warranty does not apply to statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Issuer in connection with the Memorandum by the Agent directly or through or by
counsel on the Agent's behalf. If at any time prior to the completion of the
Offering or other termination of this Agreement any event shall occur as a
result of which it may be necessary to amend or supplement the Memorandum so
that it does not include any untrue fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances then existing, not misleading, the Issuer will supply the Agent
with amendments or supplements correcting such statement or omission. The Issuer
will also provide the Agent for delivery to all offerees and purchasers and
their representatives, if any, any information, documents and instruments which
the Agent and the Issuer deem necessary to comply with applicable state and
federal law.
(d) Except as stated in the Memorandum, the execution and
delivery of this Agreement, the consummation of the transactions contemplated in
this Agreement, and compliance with the terms and provisions of this Agreement
shall not conflict with, or result in a breach of, any of the terms or
provisions of, or constitute a default under, the Restated Articles of
Incorporation, or the Restated Bylaws of the Issuer, or any indenture, mortgage
or other agreement or instrument to which the Issuer is a party or by which it
or its properties are bound, or any applicable law, rule, regulation, judgment,
order, or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Issuer or its properties.
(e) This Agreement has been duly authorized, executed, and
delivered on behalf of the Issuer, and is the valid, binding and enforceable
obligation of the Issuer, except to the extent that obligations concerning
indemnification herein may be limited by applicable securities laws.
(f) No authorization, approval, consent, or license of any
regulatory body or authority is required for the valid authorization, issuance,
sale, and delivery of the Securities, or, if so required, all authorizations,
approvals, consents, and licenses have been obtained and are in full force and
effect.
(g) Other than the Issuer's Chapter 11 case in United States
Bankruptcy Court of the Northern District of Illinois, Eastern Division (Case
No. 01-27610), there is no litigation, action, suit, investigation, customer
complaint, claim or proceeding at law or in equity by or before any arbitrator,
governmental instrumentality or other agency now pending or, to the knowledge of
the Issuer, threatened against the Issuer or any of its operations, businesses,
properties or assets (or basis therefore known to the Issuer) the adverse
outcome of which would have a material adverse effect on the business,
properties, assets, condition (financial or otherwise) or prospects of the
Issuer taken as a whole. The Issuer is not subject to any judgment, order, writ,
injunction or decree of any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which could have a material adverse effect on the business, properties,
assets, condition (financial or otherwise) or prospects of the Issuer taken as a
whole.
(h) Assuming (i) the accuracy of the information provided by
the respective subscribers in the subscription documents and the other Offering
Documents and (ii) that the Agent has complied in all material respects with the
applicable provisions of Regulation D promulgated under the Securities Act, the
offer and sale of the Securities pursuant to the terms of this Agreement and the
Offering Documents are exempt from the registration requirements of the
Securities Act and the rules and regulations promulgated thereunder. The Issuer
is not disqualified from the exemption in Rule 506 of Regulation D by virtue of
the disqualifications contained in Rule 507.
14. Covenant of the Issuer. The Issuer covenants that:
(a) The Issuer shall not at any time make or file any
amendment or supplement to the Memorandum of which the Agent previously has not
been advised and furnished a copy, to which the Agent reasonably may object in
writing. The Issuer shall prepare and file any amendments or supplements to the
Memorandum that in the opinion of counsel for the Agent may be necessary or
advisable in connection with the offering and sale of the Securities by the
Agent, and shall use its best efforts to cause each such amendment or supplement
to become effective as promptly as possible.
(b) The Issuer shall deliver to the Agent, without charge,
from time to time during the term of this Agreement as many copies of the
Memorandum as the Agent reasonably may request, and the Issuer consents to the
use of the Memorandum as permitted by applicable state and federal securities
and other laws.
(c) The Issuer shall use its best efforts to comply with
applicable state and federal securities and other laws so as to permit the
continuation of the offering and sale of the Securities.
(d) The Issuer promptly shall notify the Agent in the event of
(i) the issuance by any federal or state securities commission or authority of
any stop order suspending the sale of the Securities, or (ii) the institution or
notice of the intended institution of any action or proceeding for that purpose.
The Issuer shall make every reasonable effort to prevent the issuance of a stop
order, and, if a stop order is issued at any time, to obtain the withdrawal of
the order at the earliest possible time.
(e) The Issuer shall not sell the Securities offered pursuant
to the Memorandum to any investor who is not an "Accredited Investor" as defined
by Rule 501 of Regulation D and in Exhibit 1 to the Subscription Agreement.
(f) The net proceeds of the Offering will be used by the
Issuer substantially as set forth in the Memorandum.
(g) The Issuer shall not, during the period commencing on the
date hereof and ending on the later of (i) the closing of the Offering or (ii)
the termination of the Offering, issue any press release or other communication,
or hold any press conference with respect to the Issuer, its financial
condition, results of operations, business, properties, assets or liabilities,
or the Offering, without the prior consent of the Agent.
15. Representations and Warranties of the Agent. The Agent represents
and warrants to, and agrees with the Issuer that:
(a) The Agent is a licensed broker-dealer within the meaning
of Section 3 of the Securities Exchange Act of 1934, as amended, and is a member
in good standing of the National Association of Securities Dealers, Inc.
(b) The Agent and all persons employed by it or who work for
it as agents have all necessary permits, licenses and permissions to enable it
and them to act as agent for the Issuer in the offering and sale of the
Securities as required by applicable state and federal securities and other
laws.
16. Covenants of the Agent. The Agent covenants that:
(a) The Agent shall not make any statement or take any action
in connection with the offering and sale of the Common Stock and its activities
under and pursuant to this Agreement that is not consistent with the exemptions
from registration provided by Section 4(2) of the Securities Act and Regulation
D, including Rule 506, promulgated thereunder or that violates Section 10 of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder.
(b) The Agent shall not sell the Securities offered pursuant
to this Memorandum to any investor who is not an Accredited Investor, as defined
by Rule 501 of Regulation D and in Exhibit 1 to the Subscription Agreement.
(c) The Agent shall, in connection with the sale of the Common
Stock, provide information to the Issuer sufficient to enable the Issuer to
establish and determine that all purchasers of the Securities are Accredited
Investors.
(d) The Agent shall not sell the Securities offered pursuant
to the Memorandum by any means of public solicitation or general advertising, or
in any manner that violates the conditions imposed by securities laws in
connection with an offer and sale of securities pursuant to the exemptions from
registration contained in Section 4(2) under the Securities Act and Regulation
D, including Rules 501, 502 and 506, promulgated thereunder, or in any manner
that violates Section 10 of the Securities Exchange Act of 1934, as amended, and
Rule 10b-5 promulgated thereunder.
17. Expenses. The Issuer shall bear and pay all costs and expenses in
connection with the preparation, printing and filing of the Memorandum and any
amendments or supplements to the Memorandum, federal or state filing fees in
connection with the Offering, the preparation of this Agreement and related
documents, the issue and delivery of certificates representing the Securities to
the purchasers of the shares, federal and state documentary taxes on the issue
of the certificates to the purchasers, and the cost of furnishing the Memoranda.
18. Termination of Agreement. This Agreement may, subject to the other
provisions hereof, be terminated as follows:
(a) At any time prior to the commencement of the Offering, the
Issuer may, by notice to the Agent, terminate this Agreement; and at any time
prior to the commencement of the Offering, the Agent may, by notice to the
Issuer, terminate this Agreement.
(b) This Agreement may be terminated by the Agent at any time
by notice to the Issuer because of any failure on the part of the Issuer to
comply with any of the terms and provisions, or to fulfill any of the conditions
hereof, or if for any reason the Issuer is unable to perform its obligations
hereunder.
(c) This Agreement may be terminated by the Issuer at any time
by notice to the Agent because of any failure on the part of the Agent to comply
with any of the terms and provisions, or to fulfill any of the conditions
hereof, or if for any reason the Agent is unable to perform its obligations
hereunder.
(d) Except as provided in Section 21 hereof, this Agreement
shall terminate upon the occurrence and satisfactory completion of the offering
and sale of the Securities and the release of the proceeds by the Escrow Agent,
unless earlier terminated as provided herein.
19. Indemnification. The Issuer shall indemnify and hold harmless the
Agent and each person, if any, who controls the Agent within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages, expenses, or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or under any other statute or
at common law or otherwise, and, except as provided below, shall reimburse the
Agent and each controlling person, if any, for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, in so far as
the losses, claims, damages, expenses, liabilities, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Memorandum, or arise out of or are based upon the omission
or alleged omission to state a material fact required to be stated in the
Memorandum or necessary in order to make the statements in the Memorandum not
misleading, unless the untrue statement or omission was made in the Memorandum
in reliance upon and in conformity with information furnished in writing to the
Issuer by the Agent directly or through counsel. However, this indemnification
provision shall not benefit the Agent or any person controlling the Agent if the
Agent failed to send or give a copy of the Memorandum to a person at or prior to
the time an offer of Securities was made to that person, or otherwise acted in
violation of any covenants made by it herein.
Promptly after receipt by the Agent or any person controlling the Agent
of notice of the commencement of any action with respect to which
indemnification may be sought from the Issuer under this Section 19, the Agent
shall notify the Issuer in writing of the commencement, and, subject to the
provisions stated below, the Issuer may, but is not required to, assume the
defense of the action (including the employment of counsel and the payment of
expenses) in so far as the action relates to any alleged liability with respect
to which indemnification may be sought from the Issuer. The Agent or any person
controlling the Agent shall have the right to employ separate counsel in any
action and to participate in the defense of the action, but the fees and
expenses of the counsel shall not be the expense of the Issuer unless the
employment of the counsel has been specifically authorized in writing by the
Issuer. The Issuer shall not be liable, and shall not be required, to indemnify
any person in connection with any settlement of any action effected without the
Issuer's consent in writing.
The Agent shall indemnify and hold harmless the Issuer, each of its
directors, each of its officers who have signed the Memorandum, and each person,
if any, who controls the Issuer within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims, damages, expenses,
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act or under any other statute or at common law or
otherwise, and, except as provided below, shall reimburse the Issuer and each
director, officer or controlling person, if any, for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, (i) in so far
as the losses, claims, damages, expenses, liabilities, or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Memorandum, or arise out of or are based upon the omission
or alleged omission to state a material fact required to be stated in the
Memorandum or necessary in order to make the statements in the Memorandum not
misleading, but only in so far as the untrue statement or omission was made in
the Memorandum in reliance upon and in conformity with information furnished to
the Issuer by the Agent directly or through counsel, or (ii) in so far as the
losses, claims, damages, expenses, liabilities, or actions arise out of or are
based upon any statements made or actions taken which are not in accordance with
Agent's representations, warranties and covenants contained herein.
Promptly after receipt of notice of the commencement of any action with
respect to which indemnification may be sought from the Agent under this Section
19, the Issuer shall notify the Agent in writing of the commencement, and,
subject to the provisions stated below, the Agent shall assume the defense of
the action (including the employment of counsel and the payment of expenses) in
so far as the action relates to any alleged liability with respect to which
indemnification may be sought from the Agent. The Issuer and each director,
officer or controlling person shall have the right to employ separate counsel in
any action and to participate in the defense of the action, but the fees and
expense of the counsel shall not be the expense of the Agent unless the
employment of the counsel has been specifically authorized in writing by the
Agent. The Agent shall not be liable, and shall not be required, to indemnify
any person in connection with any settlement of any action effected without the
Agent's consent in writing.
20. Provisions to survive delivery. The representations, warranties,
covenants, indemnities, understandings, agreements, and other statements of the
Issuer and the Agent contemplated by, set forth in, or made pursuant to, this
Agreement and the indemnification agreements of the Issuer and the Agent shall
survive delivery of, and payment for, the Securities.
21. Effective time; term of agreement. This Agreement shall be
effective at 12:01 a.m. on the day specified on page 1 of this Agreement. Except
as provided below, this Agreement shall, with respect to the undertaking to sell
or to assist in selling and to pay commissions, be effective until the
termination of the offering of the Securities and the release of all funds, if
any by the Escrow Agent. With respect to all other provisions hereof, especially
the representations and warranties, covenants, and agreements to indemnify, this
Agreement shall be effective until the statute of limitations has run with
respect to all actions that may be brought in connection with or arising out of
this Agreement or any actions or omissions contemplated hereby.
22. Arbitration. In the event of any dispute arising out of or relating
hereto, the parties hereto shall submit the dispute to binding arbitration,
which shall be the sole and exclusive forum for resolving any dispute. Such
arbitration shall be conducted in Delaware by a retired District Court Judge
selected by the parties through their counsel. If counsel are unable to select
an arbitrator within ten (10) days of the date of notice given by a party
("Plaintiff") of intent to arbitrate a dispute, either party may petition the
Delaware District Court to have a retired judge appointed. Within twenty (20)
days of the appointment of an arbitrator, the Plaintiff shall file a complaint
with the arbitrator with copies to all other parties. Within fifteen (15) days
of receipt of the complaint, the opposing party or parties shall file an answer
and cross-complaint and neither document shall be subject to a motion to strike
or demurrer. These documents shall form the issues to be decided by the
arbitrator. The hearing before the arbitrator shall occur within ninety (90)
days of the appointment of the arbitrator, unless the arbitrator allows a delay
for good cause shown.
Prior to the hearing on the arbitration, the parties shall be able to
avail themselves of all of the discovery procedures provided by the Delaware
Rules of Civil Procedure, and the arbitrator shall have the right to issue
subpoenas and subpoenas duces tecum for both depositions and for the hearing on
the matter. If any disputes arise as to discovery, either party may apply to the
arbitrator for appropriate relief in accordance with the Delaware Rules of Civil
Procedure, whose decision shall be binding on the parties.
At the hearing on the matter, the rules of evidence applied in civil
cases tried in the State of Delaware shall be applied, and legible photocopies
may be used in place of original documents. Either party may order a court
reporter to transcribe the hearing.
At the close of the hearing, the arbitrator shall prepare a written
arbitration award and findings of fact and conclusions of law, if requested by
either party. The arbitration award and the findings of fact and conclusions of
law, if any, may be filed in the appropriate court in the State of Delaware, and
shall have the same force and effect as a judgment in any civil action or
proceeding. Initially, each party shall bear one-half (1/2) of the arbitrator's
fees. The final award shall include any amounts advanced for arbitrator's fees
and the reasonable attorneys' fees and costs of the prevailing party.
23. Governing law. This Agreement shall be construed in accordance with
the laws of the State of Delaware. All questions with respect to the
construction of this Agreement and the rights and liabilities of the parties to
this Agreement shall be governed by the laws of the State of Delaware. Any
action or proceeding arising out of or relating to this Agreement shall be
brought in the State of Delaware.
24. Assignment. Neither this Agreement nor any interest of any party
herein may be assigned, pledged or transferred without the prior written consent
of the parties hereto.
25. Binding effect. This Agreement inures to the benefit of, and is
binding upon, the parties hereto, and their respective heirs, representatives,
successors, assigns, and controlling person, but nothing herein shall be
construed as an authorization or right of any party to assign its rights and
obligations hereunder. A successor or an assign does not include a purchaser of
the Securities of the Issuer solely by reason of that purchase.
26. Waiver. No waiver of any provision hereof is valid unless it is in
writing and signed by the person against whom it is charged.
27. Notice. Any notice required or permitted to be given pursuant
hereto must be in writing addressed to the person at the address specified
herein, or at an address changed in this manner.
28. Entire agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day, month and year first written above.
ISSUER:
CYTOMEDIX, INC.
By:__________________________
Name:________________________
Title:_______________________
AGENT:
XXXXXXXXX & COMPANY, INC.
By:__________________________
Name:________________________
Title:_______________________
