SECURITY AGREEMENT
THIS SECURITY AGREEMENT is executed effective as of the 26th day
December, 2000, by and between Cytomedix, Inc., a Delaware corporation
("Debtor"), and TSENVI, LLC, a Delaware limited liability company, as Collateral
Agent ("Collateral Agent"), under the terms provided herein, TSENVI, LLC, a
Delaware limited liability company, Bel-Cap Delaware, LLC, a Delaware limited
liability company, Bristol Investment Fund, Ltd , and Curative Health Services,
Inc., a Minnesota corporation (each individually a "Lender," and, collectively,
the "Lenders").
W I T N E S S E T H:
WHEREAS, each Lender has advanced credit to Debtor as evidenced by a
10.0% Convertible Secured Promissory Note of even date herewith naming Debtor as
"Company" and such Lender individually as a "Holder" and payable with interest
at the rate of ten percent (10%) per annum as provided therein;
WHEREAS, to secure payment of the Secured Debt (as defined below),
Debtor has agreed to grant to Collateral Agreement, for the ratable benefit of
itself and the other Lenders pro rata to the amount of indebtedness under the
Notes (less amounts converted), a security interest in the collateral as
hereinafter described;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and in exchange for the mutual
promises and covenants contained herein, the parties hereto, intending to be
legally bound, agree as follows:
1. DEFINITIONS. For purposes of this agreement, the capitalized terms
used herein shall have the following meanings, unless the context otherwise
specifically requires:
(a) "Collateral" shall mean and refer to all of the Debtor's
personal assets and personal property and rights in and to property of any
nature whatsoever, tangible and intangible, presently owned or hereafter
acquired, including without limitation the following:
(i) all equipment, machinery, furniture, furnishings,
fixtures, and any and all other tangible personal property, and all
additions, accessions, replacements and substitutions with respect
thereto, presently owned or hereafter acquired by Debtor (hereafter
collectively referred to as the "Equipment"), including without
limitation the property described on Exhibit A attached hereto and
incorporated herein by reference;
(ii) all accounts, accounts receivable, contracts and contract
rights, chattel paper, documents, instruments, general intangibles, and
other forms of obligation and rights to the payment of money or other
property, presently owned or hereafter acquired by Debtor (hereinafter
collectively referred to as the "Accounts");
(iii) all of Debtor's inventory, including all goods,
merchandise, materials, components, work in process, furnished goods,
and other tangible personal property presently owned or hereafter
acquired by Debtor and held for sale, lease, consumption, or other use
in Debtor's business, and all additions, accessions, replacements and
substitutions with respect thereto (hereinafter collectively referred
to as "Inventory");
(iv) all insurance proceeds, refunds, and premium rebates,
whether or not any Lender or Collateral Agent is the loss payee
thereof, including, without limitation, proceeds of fire and credit
insurance, to the extent that any such proceeds, refunds and premiums
are related to any of the foregoing;
(v) all claims for tax refund, whether now existing or
hereafter arising, of such Debtor against any city, county, state or
federal government or any agency or authority or other subdivision
thereof, and the proceeds thereof;
(vi) all contract rights, intellectual property, and general
intangibles ("General Intangibles") of every kind, character and
description, both now owned and hereafter acquired, including, without
limitation, goodwill, trademarks, service marks, domain names, trade
styles, trade names, patents, applications for any of the foregoing
("Intellectual Property") and deposit accounts;
(vii) all liens, guaranties, rights, remedies, and privileges
pertaining to any of the foregoing, including the rights of stoppage in
transit;
(viii) a pledge of all of Debtor's stock, ownership interest,
partnership interest or other equity position whatsoever in any
subsidiary corporation, limited liability company, partnership, joint
venture, association, entity or other organization (domestic or
foreign); and
(ix) to the extent not otherwise included, all proceeds,
products, substitutions, and accessions of or to any and all of the
foregoing and all collateral security, indemnities, warranties and
guaranties given by any Person with respect to any of the foregoing.
(Although proceeds are covered, except as otherwise expressly provided
herein or in the other Loan Documents, Collateral Agent does not
authorize the sale or other transfer of any of the Collateral or the
transfer of any interest in the Collateral, except for the sale of
goods in the ordinary course of Debtor's business).
(b) "Debtor" shall mean and refer to Cytomedix, Inc., a
Delaware corporation, and its successors in interest.
(c) "Permitted Liens" means:
(1) liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Debtor in
conformity with generally accepted accounting principles;
(2) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;
(3) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(4) deposits by or on behalf of Debtor to secure the
performance of bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(5) liens securing indebtedness of Debtor incurred to finance
the acquisition of fixed or capital assets, provided that (i) such
liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such liens do not at
any time encumber any property other than the property financed by such
indebtedness and (iii) the amount of indebtedness secured thereby is
not increased;
(6) Liens created pursuant to this Agreement; and
(7) purchase money liens in favor of Curative Health Services,
Inc. and CHS Services, Inc. and liens referenced in Exhibit B.
(d) "Promissory Note" shall mean and refer to each Secured
Promissory Note of even date herewith naming Debtor as "Company" and a Lender as
"Holder" payable with interest at the rate of ten percent (10%) per annum on
April 15, 2001, all substantially in the form as Exhibit D, and any amendments,
modifications, extensions, renewals or refinancings thereof.
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(e) "Secured Debt" shall mean and refer to (i) all amounts
payable pursuant to a Promissory Note (including principal and interest) and
pursuant to any amendments, modifications, renewals, extensions or refinancings
thereof; (ii) all future advances from a Lender to Debtor under a Promissory
Note; (iii) any liabilities or obligations of Debtor arising under or in
connection with this Agreement or any other Loan Document, whether now existing
or hereafter arising, contingent or otherwise; (iv) any and all other
obligations of Debtor to a Lender under a Promissory Note of every kind and
description, direct or indirect, absolute or contingent, presently existing or
hereafter arising; and (v) all costs and expenses of collection of the
foregoing, or in preserving, protecting or realizing upon the Collateral,
including, without limitation, attorneys' fees and other legal expenses.
(f) "UCC" shall mean and refer to the Uniform Commercial Code,
as amended, in effect under the laws of the State of Illinois, or such other
state as may be appropriate.
2. GRANT OF SECURITY INTEREST. As security for the full and timely
payment of all of the Secured Debt, Debtor hereby assigns and grants to
Collateral Agent, ratably for the benefit of itself and the other Lenders, pro
rata to the amount of indebtedness under the Notes (less amounts converted), a
continuing first priority security interest (subject to the Permitted Liens) in
and to all Debtor's right, title, and interest in and to the Collateral; to have
and to hold unto the Collateral Agent, its successors in interest and assigns
forever, or until the earlier full payment, discharge and satisfaction of all of
the Secured Debt. Collateral Agent shall have all of the rights and remedies of
a secured party under the applicable UCC as non-exclusive rights and remedies.
3. AGENCY.
(a) Appointment. Each Lender hereby irrevocably designates and
appoints Collateral Agent as the agent (in such capacity, the "Collateral
Agent") of such Lender under this Agreement and the other Loan Documents to hold
all Collateral and act with respect to all Collateral, and each such Lender
irrevocably authorizes the Collateral Agent, in such capacity, to take such
action on its behalf in connection with the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
delegated to the Collateral Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Collateral Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Collateral Agent. Any reference to the
Collateral Agent in this Section 3 shall be deemed to refer to the Collateral
Agent solely in its capacity as a Lender.
(b) Delegation of Duties. The Collateral Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Collateral Agent shall not
be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
(c) Exculpatory Provisions. Neither the Collateral Agent nor
any of its officers, directors, partners, employees, agents, attorneys and other
advisors, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement or any other Loan Document (except to the extent
that any of the foregoing are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from its or such person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by Debtor or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Collateral Agent under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of Debtor to perform its obligations
hereunder or thereunder. The Collateral Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Debtor.
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(d) Reliance by Collateral Agent. The Collateral Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Debtor), independent accountants and other experts selected by the Collateral
Agent. The Collateral Agent may deem and treat the payee of any Promissory Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Collateral Agent.
The Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of a majority in interest of the Lenders (or
such other proportion as may be required herein) to authorize or require such
action as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of each of a majority in interest of the Lenders (or
such proportion as may be required herein) to authorize or require such action,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Promissory Notes.
(e) Non-Reliance on Collateral Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys and other advisors, partners,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Collateral Agent hereinafter taken, including any
review of the affairs of Debtor or any affiliate of Debtor, shall be deemed to
constitute any representation or warranty by the Collateral Agent to any Lender.
Each Lender represents to the Collateral Agent that it has, independently and
without reliance upon the Collateral Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition, prospects and creditworthiness of Debtor and its
affiliates and made its own decision to make its loans under its Promissory Note
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Collateral Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition,
prospects and creditworthiness of Debtor and its affiliates. The Collateral
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of Debtor or
any affiliate of Debtor that may come into the possession of the Collateral
Agent or any of its officers, directors, employees, agents, attorneys and other
advisors, partners, attorneys-in-fact or affiliates.
(f) Indemnification. The Lenders agree to indemnify the
Collateral Agent in its capacity as such (to the extent not reimbursed by Debtor
to the extent it is required to do so under the Loan Documents and without
limiting the obligation of Debtor to do so), ratably according to their
respective pro rata shares of the principal amount of the loans outstanding
under the Notes in effect on the date on which indemnification is sought under
this Section (or, if indemnification is sought after the date upon which the
loans under the Notes shall have been paid in full, ratably in accordance with
such respective pro rata shares of the principal amount of the loans outstanding
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the loans
under the Notes) be imposed on, incurred by or asserted against the Collateral
Agent in any way relating to or arising out of, this Agreement or any of the
other Loan Documents or any action taken or omitted by the Collateral Agent
under or in connection with any of the foregoing; provided, that, no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted solely from the Collateral Agent's gross
negligence or willful misconduct. Notwithstanding any other provisions of this
Agreement, the agreements in this Section shall survive the payment of such
loans and all other amounts secured hereunder.
(g) Collateral Agent In Its Individual Capacity. The
Collateral Agent and its affiliates may make loans to, and generally engage in
any kind of business with the Debtor as though the Collateral Agent was not the
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Collateral Agent. With respect to its loans made or renewed by it and any
Promissory Note issued to it, the Collateral Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not the Collateral Agent, and the terms
"Lender" and "Lenders" shall include the Collateral Agent in its individual
capacity.
(h) Successor Collateral Agent. The Collateral Agent may
resign as Collateral Agent upon 30 days' notice to the Lenders and the Debtor.
If the Collateral Agent shall resign as Collateral Agent under this Agreement
and the other Loan Documents, then the Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
subject to approval by the Debtor (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to and become
vested with the rights, powers and duties of the resigning Collateral Agent, and
the term "Collateral Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Collateral Agent's rights, powers and
duties as Collateral Agent shall be terminated, without any other or further act
or deed on the part of such former Collateral Agent or any of the parties to
this Agreement or any holders of the loans made under the Promissory Notes. If
no successor agent has been appointed and accepted appointment as Collateral
Agent by the date that is 30 days following a retiring Collateral Agent's notice
of resignation, the retiring Collateral Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and perform all of the
duties of the Collateral Agent hereunder until such time, if any, as the Lenders
appoint a successor agent as provided for above. After any retiring Collateral
Agent's resignation as Collateral Agent, the provisions of this Section shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Agreement and the other Loan Documents.
(i) Authorization to Release Liens. The Collateral Agent is
hereby irrevocably authorized by each of the Lenders to release any lien
covering any Collateral that is the subject of a sale or other disposition which
is permitted by this Agreement or the other Loan Documents.
4. REPRESENTATIONS AND WARRANTIES OF THE DEBTOR. The Debtor hereby
represents and warrants as follows and such representations and warranties shall
also be deemed to be made mutatis mutandis with respect to each subsidiary of
the Debtor as if such subsidiary were the Debtor and with respect to Cytomedix,
N.V. at such time as it becomes a stockholder of Debtor:
(a) Organization and Good Standing. The Debtor is a
corporation, duly organized, validly existing, and in good standing under the
laws of the state of its jurisdiction of organization, with full corporate power
and authority to execute, deliver an perform this agreement and to own and
operate its properties and to carry on its business as presently conducted and
anticipated. The Debtor is duly qualified as a foreign corporation to transact
business, and is in good standing and in every state or other jurisdiction where
the character of its properties owned or leased, or the nature of its
activities, makes such qualification necessary under applicable law, except
where the failure to so qualify would not have a Material Adverse Effect (as
defined below) on the Debtor. Other than as set forth on Schedule 4(a) hereto,
Debtor has not operated under any legal or fictitious names other than
"Cytomedix, Inc."
(b) Authority. Debtor has the requisite corporate power and
authority to enter into this agreement, each Promissory Note and the agreements
and documents contemplated in connection herewith (collectively, the "Loan
Documents", to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The execution and delivery of this
agreement and the Loan Documents by the Debtor and the consummation by the
Debtor of the transactions contemplated hereby and thereby, have been duly
authorized by all requisite corporate action on the part of the Debtor and its
Board of Directors, and no other corporate proceedings on the part of the Debtor
are necessary to authorize the execution, delivery and performance of this
agreement or the Loan Documents.
(c) Validity. This agreement and the Loan Documents have been
duly executed and delivered by the Debtor and constitute the legal, valid, and
binding obligations of the Debtor, enforceable against the Debtor in accordance
with their respective terms, except to the extent such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, and other similar
laws affecting the enforcement of creditors' rights generally.
(d) No Violations. Neither the execution and delivery of this
agreement or the Loan Documents nor the consummation by the Debtor of the
transactions contemplated hereby or thereby, nor the compliance by the
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Debtor with any of the provisions hereof or thereof, will (i) violate, conflict
with, or constitute a breach or default under (or an event which, with notice,
lapse of time or both, would constitute a breach or default), or give rise to
any right of termination or acceleration or result in the creation of any lien,
security interest, charge or encumbrance upon any property of the Debtor (other
than in favor of Collateral Agent) under (x) Debtor's charter (including any
certificate of designation), by-laws, or any voting agreement, stockholders'
agreement or similar document to which debtor is a party relating to the rights
of stockholders of Debtor, (y) any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which the
Debtor is a party or by which it or any of its respective properties or assets
may be bound or subject or (ii) violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to the Debtor or any
of its properties or assets.
(e) No Consent. Except for filings under applicable state and
federal securities laws, which will be timely made, no notice to, filing with,
or authorization, consent or approval of any governmental agency or authority,
body or agency is necessary or required in connection with the execution,
delivery or performance of this agreement or the Loan Documents by the Debtor.
(f) Title. Except for the security interest granted to
Collateral Agent hereunder and certain purchase money security interests in the
Equipment described on Exhibit A, Debtor is the sole owner (or, in the case of
leases or licenses, the sole right holder) of the Collateral and has good, valid
and marketable title thereto, free and clear of any and all liens, security
interests, claims, encumbrances and adverse rights or interests whatsoever
(other than the Permitted Liens). Debtor has not executed any financing
statement with respect to all or any portion of the Collateral save and except
the financing statements executed in favor of Collateral Agent in connection
with this Agreement and in connection with the Permitted Liens. Set forth on
Exhibit C is a list of all Intellectual Property for which filings with
governmental authorities have been made by the Debtor or any of its subsidiaries
(along with the type of filing, the filing number and the authority with which
it was filed).
(g) First Priority Security Interest. The security interest
granted to Collateral Agent hereunder constitute and will constitute a valid and
continuing first priority lien and security interest in all Collateral as to
which perfection may be achieved by filing under the UCC in favor of Collateral
Agent (in each case, subject to Permitted Liens).
(h) Debtor's Name and Address. Debtor's current exact name and
address of its principal place of business is:
Cytomedix, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and Debtor's previous address was:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Debtor has not previously had or transacted business under any other names or
addresses. Debtor agrees to give Collateral Agent prior notice of any change in
Debtor's name and/or address or any additional names under which Debtor intends
to transact business at least 30 days prior to any such change or the use of any
additional name(s).
(i) Possession and Location of the Collateral. The Collateral
is and shall remain in the exclusive possession and control of Debtor, and
Debtor shall not transfer possession of or relocate all or any portion of the
Collateral without each Lender's prior written consent, unless Collateral Agent
has received 30 days' prior written notice of such relocation and determines
that its security interest is not adversely affected.
(j) Litigation. There is no litigation, action, suit,
proceeding, claim or investigation pending, or to the knowledge or Debtor
threatened, against Debtor or with respect to all or any portion of the
Collateral, or which calls
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into question the validity or enforceability of this agreement or any Promissory
Note or which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect (as hereinafter defined).
(k) Books and Records. All books, records and documents
relating to the Collateral are and shall continue to be true, correct and
genuine in all material respects.
(l) Permits. Except for exceptions that would not have a
Material Adverse Effect, the Debtor is not in violation of or in default under
any applicable statute, rule, order, decree, writ, injunction or regulation of
any governmental body (including any court). Except for exceptions that would
not have a Material Adverse Effect, the Debtor has all permits and licenses to
operate its business.
(m) Taxes. The Debtor is not delinquent in the payment of any
taxes which have been levied or assessed by any governmental authority against
it or its assets. The Debtor has timely filed all material tax returns which are
required by law to be filed, and has paid all material taxes and all other
assessments or fees levied upon the Debtor or upon its properties to the extent
that such taxes, assessments or fees have become due. Except for exceptions that
would not have a Material Adverse Effect, no controversy in respect of income
taxes is pending or, to the knowledge of the Debtor, threatened.
(n) Event of Default. No event has occurred and is continuing
which constitutes an Event of Default (as hereinafter defined) or would
constitute such an Event of Default after notice or lapse of time or both.
(o) Full Disclosure. None of the Loan Documents, nor any
statements furnished by or on behalf of the Debtor to any Lender in connection
with the Loan Documents nor any of the Debtor's filings with the Securities and
Exchange Commission, contains or will contain any untrue statement of a material
fact or omits or will omit a material fact necessary to make the statements
contained therein or herein not misleading, in light of the circumstances when
made. To the Debtor's knowledge, there is no fact which the Debtor has not
disclosed to each Lender in writing which materially affects adversely or, to
the Debtor's knowledge, will materially and adversely affect the Collateral, the
Collateral Agent's liens in the Collateral or the priority thereof, the other
assets, business, liabilities, operations, prospects, profits or condition
(financial or otherwise) of the Debtor or the ability of the Debtor to perform
its obligations under each Promissory Note or the other Loan Documents (a
"Material Adverse Effect).
(p) Solvency. The Debtor is solvent.
(q) Compliance With Laws. Except for exceptions that would not
have a Material Adverse Effect, the Debtor has duly complied with, and the
Collateral and its business operations and leaseholds are in compliance in all
material respects with, the provisions of all federal, state and local laws,
rules and regulations applicable to the Debtor, the Collateral or the conduct of
the Debtor's business.
(r) Corporate Structure. The Debtor's corporate structure as
of the date hereof, including any direct or indirect subsidiaries, is as set
forth in Schedule 4(r) hereto.
5. COVENANTS OF DEBTOR. Debtor covenants and agrees that, from and
after the date of this Agreement until all of the Secured Debt shall have been
paid in full (it being understood, for purposes of this Section 5, that "Debtor"
shall also apply to each of its subsidiaries):
(a) Covenants. Debtor shall take, or shall refrain from
taking, as the case may be, each action that is necessary to be taken or not
taken, as the case may be, so that no Event of Default is caused by the failure
to take such action or to refrain from taking such action by such Debtor.
(b) Insurance. Debtor shall cause the casualty insurance
policy maintained by it to (i) provide that no cancellation, reduction in amount
or change in coverage thereof shall be effective until at least 30 days after
receipt by Collateral Agent of written notice thereof, and (ii) name Collateral
Agent, for the benefit of the Lenders, as an additional insured party and as the
loss payee.
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(c) Maintenance of Perfected Security Interest; Further
Documentation.
(i) Debtor shall maintain the security interest created by
this Agreement as a perfected security interest having the priority
described herein and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(ii) Debtor will furnish to each Lender from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
such Lender may reasonably request, all in such detail as such Lender
may reasonably request.
(iii) At any time and from time to time, upon the written
request of any Lender, and at the sole expense of Debtor, Debtor will
promptly and duly execute, deliver and/or have recorded with
appropriate agencies such further instruments and documents and take
such further actions as such Lender may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements
under the UCC (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby and to the filing
of any documents necessary to obtain and preserve the rights and powers
in the Intellectual Property.
(d) Changes in Locations, Name, etc. Debtor will not, except
upon 30 days' prior written notice to the each Lender and delivery to Collateral
Agent promptly thereafter of all additional executed financing statements and
other documents reasonably requested by any Lender to maintain the validity,
perfection and priority of the security interests provided for herein:
(i) change the location of its chief executive office or
principal place of business from that referred to in Section 4(h)
above; or
(ii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become seriously misleading.
(e) Notices. Debtor will advise the each Lender promptly, in
reasonable detail, of any lien (other than security interests created hereby or
Permitted Liens) on any of the Collateral which would adversely affect the
ability of the Collateral Agent to exercise any of its remedies hereunder.
(f) Receivables Collateral.
(i) Other than in the ordinary course of business consistent
with past practices, Debtor will not (i) grant any extension of the
time of payment of any receivables collateral, (ii) compromise or
settle any receivables collateral for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the
payment of any receivables collateral, (iv) allow any credit or
discount whatsoever on any receivables accounts or accounts receivable,
(v) except for Permitted Liens, sell or pledge any interest in any
receivables, collateral, or (vi) amend, supplement or modify any
receivables collateral in any manner that could adversely affect in any
material respect the value thereof.
(ii) If at any time the aggregate amount owing to the Debtor
on all Accounts as to which a governmental authority is an obligor
exceeds 20% of the aggregate amount owing to the Debtor on all
Accounts, Debtor shall so notify Collateral Agent and, if requested by
any Lender, at the Debtor's sole cost and expense, from and after the
date on which such aggregate amount first exceeds such percentage,
deliver to Collateral Agent such assignments, notices of assignment and
other documents or information as shall be necessary or otherwise
reasonably requested by the Collateral Agent to permit the assignment
hereunder of all Accounts as to which a Governmental Authority is an
obligor pursuant to all applicable Governmental Requirements
(including, without limitation, the Assignment of Claims Act of 1940,
as amended).
(g) Inventory.
8
(i) Debtor shall not engage in any sale of the Inventory other
than for fair consideration in the conduct of such Debtor's business in
the ordinary course and shall not engage in sales or other dispositions
to creditors (except for arms-length sales or disposition of finished
goods to Curative Health Services, Inc. and CHS Services, Inc.); sales
or other dispositions in bulk; and any use of any of the Inventory in
breach of any provision of this Agreement.
(ii) No sale of Inventory shall be on consignment, approval,
or under any other circumstances such that, with the exception of the
Debtor's customary return policy applicable to the return of inventory
purchased by the Debtor's customers in the ordinary course, such
Inventory may be returned to the Debtor without the consent of each
Lender.
(iii) All Inventory now owned or hereafter acquired by such
Debtor is and will be of good, and merchantable quality and free from
defects (other than defects within customary trade tolerances).
(h) Accounts.
(i) The amount of each Account shown on the books, records,
and invoices of Debtor represented as owing by each account debtor is
and will be the correct amount actually owing by such account debtor
and shall have been fully earned by performance by Debtor, except as
otherwise permitted by generally accepted accounting principles.
(ii) Debtor has no knowledge of any impairment of the validity
or collectibility of any of the Accounts in an aggregate amount in
excess of Debtor's reserve or allowance therefore on its regularly
prepared balance sheet and shall notify each Lender of any such fact
immediately after Debtor become aware of any such impairment.
(iii) Other than Permitted Liens, Debtor shall not post any
bond to secure its performance under any agreement to which Debtor is a
party nor cause any surety, guarantor, or other third party obligee to
become liable to perform any obligation of Debtor (other than to each
Lender and Collateral Agent) in the event of the Debtor's failure so to
perform.
(i) Notification to Account Debtors. Collateral Agent shall
have the right at any time following an Event of Default and at anytime
thereafter) to notify any of the Debtor's account debtors to make payment
directly to Collateral Agent and to collect all amounts due on account of the
Collateral.
(j) Transactions With Related Persons. Other than in
connection with the transactions contemplated hereby or as set forth on Schedule
5(j), the Debtor shall not, directly or indirectly, make any loan or advance,
purchase, assume or guarantee any note to or from any of its officers,
directors, shareholders or Affiliates (as defined for purposes of the Securities
Act of 1933, as amended) ("Securities Act"), or to or from any member of the
immediate family of any of its officers, directors, shareholders or Affiliates,
or subcontract any operations to any Affiliate; or enter into, or be a party to,
any transaction with any Affiliate or shareholder of the Debtor, except in the
ordinary course of and pursuant to the reasonable requirements of the Debtor's
business and upon fair and reasonable terms which are fully disclosed to each
Lender and are no less favorable to the Debtor than would obtain in a comparable
arm's length transaction with a Person not an Affiliate or shareholder of the
Debtor.
(k) [Reserved]
(l) Corporate Existence and Maintenance of Properties. The
Debtor shall maintain and preserve its corporate existence and all rights,
privileges and franchises now enjoyed; and the Debtor shall conduct its business
in an orderly, efficient and customary manner, keep its properties in good
working order and condition, and from time to time make all needed repairs to,
renewals of or replacements of its properties (except to the extent that any of
such properties is obsolete or is being replaced) so that the efficiency of such
property shall be maintained and preserved. The Debtor shall file or cause to be
filed in a timely manner all reports, applications, estimates and licenses which
shall be required by any governmental authority and which, if not timely filed,
would have a Material Adverse Effect.
9
(m) Merger and Dissolution. The Debtor shall not liquidate or
dissolve, or enter into any consolidation, merger, syndicate, share exchange or
other business combination or sell, lease or dispose of its business or assets
as a whole or such part as in the opinion of each Lender constitute a
substantial portion of its business or assets (except for transactions among the
Debtor and its subsidiaries); provided, however, that the foregoing shall be
inapplicable with respect to the proposed merger which is consummated in
accordance with the Agreement and Plan of Merger, to which Debtor and Cytomedix,
N.V. are to be parties ("Exchange Agreement") and subject to the following
further conditions: (i) the majority shareholder of Debtor after consummation
thereof and all of its subsidiaries shall have unconditionally guaranteed the
Secured Debt in a manner, form and substance acceptable to each Lender in its
absolute discretion and Collateral Agent (on behalf of the Lenders) shall have
obtained a first perfected security interest in all of such shareholder's and
its subsidiaries' assets (subject only to Permitted Liens), including, but not
limited to, such shareholder's stock in Borrower; (ii) upon consummation of the
transactions contemplated by the Exchange Agreement, the sale by each Lender of
all of the securities issuable upon conversion of its Promissory Note shall have
been duly registered under the Securities Act and such securities shall be
freely tradable without any restrictions except under the Securities Act and
applicable securities laws; (iii) the Exchange Agreement and the agreements
referenced therein shall have been consummated without modification; and (iv)
there having occurred no Event of Default and the Secured Debt having been
repaid or converted in full.
(n) Acquisitions. Except for the acquisition of Curative
Health Service, Inc. and CHS Services, Inc., the Debtor shall not acquire the
business or all or a substantial portion of the assets of any Person, whether by
purchase of stock, assets or otherwise.
(o) Indebtedness. The Debtor shall not create, incur or suffer
to exist any indebtedness for money borrowed or capitalized lease obligations
except for (a) the Secured Obligations, (b) indebtedness secured by Permitted
Liens, and (c) as set forth on Schedule 5(o).
(p) Disposition of Assets. The Debtor shall not sell, lease,
transfer, convey or otherwise dispose of any of its assets or property except
for sales of inventory in the ordinary course of business, disposition of worn
out and obsolete assets and sales of assets on an arm's-length basis not to
exceed $25,000 in any year.
(q) Restricted Investments. The Debtor shall not make any
loans, advances or extensions of credit to, or any investment in cash or by
delivery of property in, any Person, whether by acquisition of stock,
indebtedness or other obligation or security, or by loan, advance or capital
contribution, or otherwise, except for travel or other reasonable expense
advances to employees in the ordinary course of business, extensions of trade
credit in the ordinary course of business, investments in cash and cash
equivalents, investments by the Debtor in any entity a value (measured as of the
date made), when aggregated with all other investments made hereunder, that does
not exceed $25,000, and transfers of assets among Debtor and its subsidiaries.
(r) Restrictions on Distributions and Other Payments; Charter
Amendments. The Debtor shall not (a) declare any dividend on or incur any
liability to make any payment or distribution of cash or other property or
assets in respect of any of the Debtor's securities, or (b) make any payment on
account of the purchase, redemption or other retirement of any of the Debtor's
securities or any other payment or distribution made in respect thereof, either
directly or indirectly. The Debtor shall not modify its Certificate of
Incorporation or Bylaws without each Lender's prior written consent in a manner
that could reasonably be expected to be adverse to any Lender or which is
inconsistent with any Loan Document. Notwithstanding the foregoing, wholly-owned
subsidiaries of the Debtor may pay dividends or make other distributions on any
of such subsidiaries' equity interests owned by Debtor.
(s) New Business. The Debtor shall not engage in any business
other than the business in which the Debtor is currently engaged or a business
reasonably related thereto or make any material change in any of its business
objectives, purposes and operations which might in any way adversely affect the
repayment of the Secured Debt.
(t) Subsidiaries. The Debtor shall cause each of its
subsidiaries (and, upon consummation of the Exchange Agreement, its sole
shareholder and such sole shareholder's subsidiaries) to execute a secured
guaranty in favor of the Collateral Agent (for the benefit of the Lenders) to
secure the Secured Debt with a first lien on all of its assets (subject only to
Permitted Liens) and to take such other actions in connection therewith as any
Lender shall request. Such
10
secured guaranties shall contain representations, warranties and covenants which
are substantially similar (but with application to the guarantor) to those set
forth herein and such others as any Lender shall require in its sole and
absolute discretion.
6. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an "Event of Default" hereunder (it being understood
that for the purposes of this Section 6 "Debtor" shall also be a reference to
each subsidiary of Debtor (and to Cytomedix., N.V. after it becomes a
shareholder of Debtor) as well, so that if any of the following events occurs
with respect to any such subsidiary it would constitute an Event of Default):
(a) nonpayment by the Debtor of any portion of the principal
or interest under any Promissory Note or to any other holder of the Debtor's
indebtedness for borrowed money or capitalized lease obligations as and when
due; or
(b) the occurrence of any event which would permit any Lender
to accelerate payment of its Promissory Note or which would permit any other
party to whom the Debtor is indebted to accelerate the Debtor's obligation for
borrowed money or capitalized lease obligations to such party.
7. RIGHTS OF COLLATERAL AGENT UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter,
the Collateral Agent may exercise any rights under applicable law or the Loan
Documents, including, but not limited to, any one or more of the following
rights and remedies:
(a) Upon the occurrence of an Event of Default, and at any
time thereafter, Collateral Agent may, at its option, declare all of the Secured
Debt immediately due and payable (and upon an Event of Default arising by virtue
of Debtor's bankruptcy all of the Secured Debt shall automatically and
immediately be deemed declared due and payable), notwithstanding any of the
terms thereof and exercise any rights and remedies available to a secured party
under this agreement, under the UCC, or otherwise available at law or in equity,
including without limitation the right to enter upon any of the premises of the
Debtor, with or without process of law, and take immediate possession of and
remove the Collateral or any part thereof and collect and receive all income,
revenues, payments and proceeds therefrom. Debtor shall, upon Collateral Agent's
request, assemble the Collateral (and all records and documents relating
thereto) and make such items available to Collateral Agent at a place designated
by Collateral Agent which is reasonably convenient to the parties. Without
removal, Collateral Agent may render any Equipment unusable and may dispose of
such items of Collateral at the Debtor's business premises as provided under the
UCC.
(b) Collateral Agent may sell, lease, or otherwise dispose of
all or any portion of the Collateral in any commercially reasonable manner.
Disposition of the Collateral may be made by any one or more public or private
proceedings upon any one or more contracts. Any such sale or disposition may be
made in whole, in part, in units, or in parcels, and at any time and place
designated by Collateral Agent. Any such sale or disposition may be for cash,
upon credit, or upon such other terms and conditions as Collateral Agent may
determine, in its sole discretion.
(c) Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, reasonable notification of the time and place of any public sale or
reasonable notification of the time after which any private sale or other
intended disposition is to be made shall be sent by the Collateral Agent to the
Debtor unless the Debtor after the occurrence of an Event of Default shall have
signed a statement renouncing or modifying its right to notification of sale.
The requirements of a reasonable notice hereunder shall be met if such notice is
mailed by ordinary mail, postage prepaid, addressed to Debtor at its business
address described herein, at least ten days before the time of such sale or
disposition.
(d) Each Lender shall have the right to buy all of any portion
of the Collateral at any public or private sale.
(e) The Debtor acknowledges that when all or any portion of
the Collateral is disposed of by Collateral Agent after the occurrence of an
Event of Default, that such disposition shall transfer to any purchaser for
11
value all of the Debtor's rights and interests therein and any such purchaser
shall take free of all rights and interests of the Debtor in such property.
(f) Upon the occurrence of an Event of Default, Collateral
Agent shall have the right to notify persons obligated to Debtor on any Accounts
to make payment thereof directly to Collateral Agent and Collateral Agent may
take control of all the proceeds of the Accounts. After the occurrence of an
Event of Default, the Debtor will not, without the prior written consent of
Collateral Agent, grant any extension of the time for payment of any of the
Accounts, compromise or settle any accounts for less than the full amount
thereof, or release wholly or partly any person liable for the payment thereof
or allow any credit or discount whatsoever thereon.
8. APPLICATION OF PROCEEDS AND DEFICIENCY. The proceeds of any
disposition of all or any portion of the Collateral following an Event of
Default shall be applied in the following order:
(a) First, to the payment of all reasonable expenses of
retaking, holding, preparing the Collateral for sale or lease, and selling,
leasing, or otherwise disposing of the Collateral, including without limitation
reasonable attorneys' fees and other costs incurred by the Lenders and the
Collateral Agent in connection therewith;
(b) Second, to the full and complete satisfaction of all of
the Secured Debt; and
(c) Third, any surplus shall be remitted by Collateral Agent
to Debtor promptly after payment of all of the foregoing. In the event there is
a surplus and any other person makes a claim to the surplus amount, the Lenders
may hold said sum (without liability for interest or otherwise) or institute an
interpleader action and deposit said sum with an appropriate court of competent
jurisdiction until such time as the rights in such surplus are fully and finally
determined by a final nonappealable decision of a court of competent
jurisdiction or by agreement of all interested parties.
To the extent the proceeds from the disposition of the Collateral are
insufficient to satisfy items 8(a) and (b) above, Debtor shall remain liable to
the Lenders for the payment of such deficiency, with interest at the rate of ten
percent (10%) per annum.
9. POWER OF ATTORNEY. Debtor hereby makes, constitutes and appoints
Collateral Agent as its true and lawful agent and attorney in fact, with full
power of substitution, and in Debtor's name, place and stead after the
occurrence of an Event of Default (i) to collect, pursue collection of, and
receive payment for any and all income, proceeds or payments with respect to any
Collateral; (ii) to endorse the name of Debtor upon any notes, checks,
acceptances, drafts, money orders, instruments or other documents relating to
the Collateral, or the income, proceeds, or payments with respect thereto so as
to affect the deposit and collection thereof, (iii) to waive, ▇▇▇ for, settle,
adjust, or compromise any claims or right with respect to the Collateral; and
(iv) to take any action in the name and on behalf of the Debtor to fulfill any
representation, warranty, covenant or agreement of the Debtor contained herein
or as may be necessary or appropriate to carry out the purposes and intent of
this agreement and to perfect and protect the Collateral Agent's security
interest in the Collateral and its rights therein. Debtor agrees that neither
Collateral Agent nor any of its agents, designees, officers or employees will be
liable for any acts of commission or omission, or for any error of judgment or
mistake of facts or law with respect to the exercise of said power of attorney
save and except fraud, gross misconduct, or a knowing violation of law. The
power of attorney granted hereunder is coupled with an interest and shall be
irrevocable during the term of this agreement.
10. DURATION. This agreement shall continue in full force and effect,
and the security interest granted hereby and the representations, warranties,
covenants and obligations of the Debtor hereunder and all the terms, conditions
and provisions hereof shall continue to be fully operative until the Debtor
shall have fully paid and discharged all of the Secured Debt. Debtor agrees that
to the extent a payment or payments to a Lender are subsequently invalidated,
set aside or otherwise required to be repaid, the obligation or part thereof
intended to be satisfied, and the security interest in the collateral granted
hereby, shall be revived and continued in full force and effect as if said
payment had not been made.
11. MISCELLANEOUS.
12
(a) Assignment. This agreement and the rights, obligations and
duties of the Debtor hereunder shall not be assignable or otherwise transferable
by Debtor. Any Lender may, upon notice to Debtor, transfer, participate or
assign any or all of its rights and obligations under this Agreement.
(b) Fees of Legal Counsel. In the event a Lender or Collateral
Agent shall employ legal counsel to protect its rights hereunder or to enforce
any term or provision hereof or to protect its interest in the Collateral, such
attorneys' fees and other legal expenses shall become part of the Secured Debt
and shall be payable by Debtor to a Lender and Collateral Agent upon demand. The
Debtor shall pay all fees and expenses of the Lenders and Collateral Agent in
connection with the negotiation and consummation of this agreement and the Loan
Documents.
(c) Further Assurances. Debtor agrees that from time to time
hereafter, upon request, it will, at its sole expense, execute, acknowledge and
deliver such other instruments and documents and take such further action as may
be reasonably necessary to carry out the intent of this agreement and the Loan
Documents, specifically including, but not limited to the delivery of executed
stock powers and stock certificates or other evidences of ownership necessary to
perfect the pledge of any such securities granted hereunder and the execution
and delivery of patent and other intellectual property assignments. The Debtor
shall make appropriate entries upon its financial statements and its books and
records disclosing the Collateral Agent's liens and security interests in the
Collateral.
(d) Modification. No term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby.
(e) Binding Effect and Benefit. This agreement shall inure to
the benefit of, and shall be binding upon, the parties hereto, their heirs,
executors, administrators, personal representatives, successors in interest and
permitted assigns.
(f) Headings and Captions. Subject headings and captions are
included for convenience purposes only and shall not affect the interpretation
of this agreement.
(g) Notice. All notices, requests, demands and other
communications permitted or required hereunder shall be in writing, and either
(i) delivered in person, (ii) sent by express mail or other overnight delivery
service providing receipt of delivery, (iii) mailed by certified or registered
mail, postage prepaid, return receipt requested or (iv) sent by telex, telegraph
or other facsimile transmission as follows:
If to Debtor, addressed or delivered in person to:
Cytomedix, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
13
If to the Collateral Agent, on behalf of the Lenders:
TSENVI, LLC
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Akerman Senterfitt
▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may designate by notice in accordance
with this Section.
Any such notice or communication, if given or made by prepaid,
registered or certified mail or by recorded express delivery, shall be deemed to
have been made when actually received, but not later than three (3) business
days after the same was properly posted or given to such express delivery
service and if made properly by telex, telecopy or other facsimile transmission
such notice or communication shall be deemed to have been made at the time of
dispatch.
(h) Severability. If any portion of this agreement is held
invalid, illegal or unenforceable, such determination shall not impair the
enforceability of the remaining terms and provisions herein, which may remain
effective, and to this end this agreement is declared to be severable.
(i) Time for Performance. Time is of the essence in this
agreement.
(j) Waiver. No waiver of a default, breach or other violation
of any provision of this agreement shall operate or be construed as a waiver of
any subsequent default, breach or other violation or limit or restrict any right
or remedy otherwise available. No delay or omission on the part of any Lender or
Collateral Agent to exercise any right or power arising by reason of a default
shall impair any such right or power or prevent its exercise at any time during
the continuance thereof.
(k) Gender and Pronouns. Throughout this agreement, the
masculine shall include the feminine and neuter and the singular shall include
the plural and vice versa as the context requires.
(l) Entire Agreement. This document and each Promissory Note
constitute the entire agreement of the parties and supersedes any and all other
prior agreements, oral or written, with respect to the subject matter contained
herein.
(m) GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL
BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED,
IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS)
OF THE STATE OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY
RECEIVED, THE DEBTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS. EACH OF THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT OR PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. THE
DEBTOR WAIVES ANY OBJECTION WHICH THE DEBTOR MAY HAVE BASED ON LACK OF
JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO ANY SUIT OR PROCEEDING
INSTITUTED BY ANY LENDER OR COLLATERAL AGENT UNDER THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN ANY STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF
ILLINOIS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF ANY LENDER OR COLLATERAL AGENT TO BRING ANY ACTION OR
14
PROCEEDING AGAINST THE DEBTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH HAS JURISDICTION OVER THE DEBTOR OR ITS PROPERTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS AND COLLATERAL AGENT TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, MAKE THE LOANS AND EXTEND THE
OTHER FINANCIAL ACCOMMODATIONS CONTEMPLATED HEREUNDER AND THEREUNDER.
(n) Incorporation by Reference. All exhibits and documents
referred to in this agreement shall be deemed incorporated herein by any
reference thereto as if fully set out.
(o) Counterparts. This agreement may be executed in one or
more counterparts (all counterparts together reflecting the signature of all
parties) each of which shall be deemed an original, and all of which together
shall constitute one and the same instrument.
(p) Consent to Jurisdiction and Service of Process. Debtor
hereby irrevocably (i) consents to the jurisdiction of the courts of the State
of Illinois and of any federal court located in Illinois in connection with any
action or proceeding arising out of or relating to this agreement, or any other
document or exhibit relating hereto or delivered in connection therewith and
(ii) consents that service of legal process in any such action or proceeding may
be made in any manner permitted by the rules of practice and procedure
applicable to such courts.
(q) [Reserved]
(r) Debtor's Failure to Pay Costs or Expenses. If the Debtor
fails to pay any cost or expense required hereunder to be paid by Debtor,
(including, without limitation, insurance and taxes) any Lender and/or
Collateral Agent may, at its option, pay such cost or expense on behalf of the
Debtor, and in such event the amount so paid by such party shall become part of
the Secured Debt hereunder and shall be payable by Debtor to such party upon
demand.
(s) Inspection. Any Lender and/or Collateral Agent (by any of
its respective officers, employees and agents) shall have the right, at any
reasonable time or times during the Debtor's usual business hours, to inspect
the Collateral, all records related thereto (and to make extracts from such
records), and the premises upon which any of the Collateral is located, after an
Event of Default, to request information relating to the Debtor from any Person
and to verify the amount, quality, quantity, value and condition of, or any
other matter relating to, the Collateral. Collateral Agent may, at any time upon
and after the occurrence of a default or an Event of Default and during the
continuance thereof, employ and maintain in the Debtor's premises custodians
selected by Collateral Agent who shall have full authority to do all acts
necessary to protect Collateral Agent's interest. All expenses incurred by
Collateral Agent by reason of the employment of such custodians shall be paid by
the Debtor, added to the Secured Debt and secured by the Collateral. The Debtor
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by any Lender or the
Collateral Agent from or on behalf of the Debtor, and the Debtor does hereby
irrevocably agree that each Lender and the Collateral Agent shall have the
continuing exclusive right to apply and to reapply any and all such payments and
collections received at any time or times hereafter by such Lender and/or
Collateral Agent or its agents against the Secured Debt which are due and
payable at the time of such application, in such manner as provided herein.
(t) Non-Cumulative Remedies. The enumeration of the Lender's
and Collateral Agent's rights and remedies set forth in this agreement is not
intended to be exhaustive and the exercise by them of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder, under the Loan Documents or under any other agreement to which the
Debtor and any Lender or which may now or hereafter exist in law or in equity or
by suit or otherwise. No delay or failure to take action on the part of any
Lender or Collateral Agent in exercising any right, power or privilege shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or privilege preclude other or further exercise thereof or the
exercise of any other right, power or privilege or shall be construed to be a
waiver of any Event of Default. No course of dealing between the Debtor and any
other party hereto or its employees shall be effective to change, modify or
discharge any provision of this agreement or to constitute a waiver of any Event
of Default. Neither any Lender nor Collateral Agent shall not, under any
circumstances or in any event whatsoever, have any liability for any error,
omission
15
or delay of any kind occurring in the liquidation of the Collateral or for any
damages resulting therefrom except damages directly attributable to such party's
(or its officers', employees' or agents') gross negligence or willful
misconduct.
(u) Survival of Agreements. All agreements, covenants,
representations and warranties contained herein or made in writing by or on
behalf of the Debtor in connection with the transactions contemplated hereby
shall survive the execution and delivery of this Agreement and the other Loan
Documents.
(v) Indemnification of the Collateral Agent and Lenders. From
and at all times after the date of this agreement, and in addition to all of
Collateral Agent's and Lender's other rights and remedies against the Debtor,
the Debtor agrees to hold each of them harmless from, and to indemnify each of
them against, all losses, damages, costs and expenses (including, but not
limited to, attorneys' fees, costs and expenses) incurred by any of them from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or relating to any suit, action or proceeding by any
Person, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any Person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution or performance of, this agreement and the
other Loan Documents; provided, however, that the foregoing indemnification
shall not protect any party from loss, damage, cost or expense directly
attributable to its willful misconduct or gross negligence. All of the foregoing
losses, damages, costs and expenses of Collateral Agent and the Lenders shall be
payable by the Debtor upon demand any of them, and shall be additional Secured
Debt hereunder secured by the Collateral.
16
IN WITNESS WHEREOF, the parties have executed this agreement effective
as of the day and year aforesaid.
DEBTOR:
CYTOMEDIX, INC.
By: /s/ ▇▇▇▇▇ ▇. Cour
-------------------------------
Title: President
----------------------------
COLLATERAL AGENT:
TSENVI, LLC
By: ▇. ▇▇▇▇▇▇▇ Irrevocable Securities Trust
By: /s/ illegible
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: Trustee
------------------------
LENDERS:
BEL-CAP DELAWARE, LLC
By: Bel-Cap Investments, Ltd.
By: /s/ illegible
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Title: President
------------------------
BRISTOL INVESTMENT FUND, LTD
By: /s/ illegible
-------------------------------
Name: illegible
-------------------------
Title: Director
------------------------
CURATIVE HEALTH SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Title: Senior Vice President,
Business Development
------------------------
TSENVI, LLC
By: ▇. ▇▇▇▇▇▇▇ Irrevocable Securities Trust
By:
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: Trustee
------------------------
LIST OF OMITTED SCHEDULES AND EXHIBITS
Exhibit A - Equipment
Exhibit B - Permitted Liens
Exhibit C - Intellectual Property
Schedule 4(a) - Other Legal or Fictitious Names
Schedule 5(j) - Related Transactions
Schedule 5(o) - Permitted Indebtedness
All above schedules and exhibits have been omitted from this report in
accordance with Item 601 of Regulation S-K. The Registrant hereby agrees to
furnish supplementally to the Securities and Exchange Commission a copy of any
omitted schedule or exhibit hereto upon request.