Exhibit 10.1
Name of Subscriber: Parker H. Petit
SUBSCRIPTION AGREEMENT
5% CONVERTIBLE PROMISSORY NOTE
MiMedx Group, Inc.
811 Livingston Ct. SE, Suite B
Marietta, GA 30067
Re: 5% Convertible Promissory Note of MiMedx Group, Inc.
ARTICLE 1
SUBSCRIPTION
Section 1.1 Subscription. The undersigned subscriber (“Subscriber”) hereby
irrevocably subscribes for and agrees to purchase a 5% Convertible Senior
Secured Promissory Note (the “Note”) from MiMedx Group, Inc., a Florida
corporation (the “Company”), in the principal amount set forth below, on the
terms and conditions described in this subscription agreement (this
“Subscription Agreement”) and the 5% Convertible Promissory Note (the “Note”)
attached hereto.
Amount and Dollar Value of Note Subscribed For: $500,000
THE UNDERSIGNED SUBSCRIBER IS REQUIRED TO CHECK THE APPROPRIATE BOX ON THE
ACCREDITED INVESTOR CERTIFICATION FOUND ON PAGE 7 HEREOF TO CERTIFY HIS, HER OR
ITS STATUS AS AN ACCREDITED INVESTOR.
Section 1.2 Advances. Until December 20, 2009, the Subscriber agrees to advance
to the Company up to $500,000 as requested by the Company to fund its working
capital needs.
Section 1.3 Conversion. At any time at the election of the Subscriber, the Notes
may be converted into common stock of the Company at the price per share at
which the Company sells the Company’s Common Stock pursuant to the $5,000,000
private placement approved by the Corporation’s Board of Directors on
September 22, 2009, or, if there are no such sales, $.60 per share.
Section 1.4 Acceptance or Rejection. The undersigned understands that the
Company will accept this subscription) only after the Subscriber has executed
and delivered this Subscription Agreement, together with the accompanying Note
and Warrant Agreement (the “Warrant”). Copies of the fully executed Subscription
Agreement, Note and Warrant will be delivered to you promptly after acceptance.
ARTICLE 2
INVESTOR REPRESENTATIONS, WARRANTIES AND COVENANTS
The undersigned makes the following representations, warranties and covenants
with the intent that the same will be relied upon by the Company:

 

 

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Section 2.1 Information. The undersigned acknowledges that the undersigned has
been offered the opportunity to obtain information, to verify the accuracy of
the information received by him, her or it and to evaluate the merits and risks
of this investment and to ask questions of and receive satisfactory answers
concerning the terms and conditions of this investment. The undersigned
understands that information regarding the Company is on file with the
Securities and Exchange Commission (“SEC”), and the undersigned has reviewed
such documents and information as he, she or it has deemed necessary in order to
make an informed investment decision with respect to the investment being made
hereby. The Company has made its officers available to the undersigned to answer
questions concerning the Company and the investment being made hereby. In making
the decision to purchase the Note, the undersigned has relied and will rely
solely upon independent investigations made by him, her or it. The undersigned
is not relying on the Company with respect to any tax or other economic
considerations involved in this investment. Other than as set forth in Article 3
hereof, no representations or warranties have been made to the undersigned by
the Company. To the extent the undersigned has deemed it appropriate, the
undersigned has consulted with his, her or its own attorneys and other advisors
with respect to all matters concerning this investment.
Section 2.2 Not a Registered Offering. The undersigned understands that the Note
issued hereunder (including any securities issuable upon conversion thereof) has
not been and is not being registered with the SEC nor with the governmental
entity charged with regulating the offer and sale of securities under the
securities laws and regulations of the state of residence of the undersigned and
are being offered and sold pursuant to the exemption from registration provided
in Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) promulgated under the 1933 Act by the
SEC and limited exemptions provided in the “Blue Sky” laws of the state of
residence of the undersigned, and that no governmental agency has recommended or
endorsed the Note or made any finding or determination relating to the fairness
for investment of the Note (including any securities issuable upon conversion
thereof) or of the adequacy of the information on file with the SEC or this
Subscription Agreement. The undersigned is unaware of, and is in no way relying
on, any form of general solicitation or general advertising in connection with
the offer and sale of the Note (including any securities issuable upon
conversion thereof). The undersigned is purchasing the Note without being
furnished any offering or sales literature or prospectus.
Section 2.3 Purchase for Investment. The undersigned is subscribing for the Note
solely for his, her or its own account for investment purposes and not with a
view to, or with any intention of, a distribution, sale or subdivision for the
account of any other individual, corporation, firm, partnership, limited
liability company, joint venture, association or person. The undersigned
represents that he, she or it understands that there is no public market for the
Note and that no such market will ever exist.
Section 2.4 Accredited Investor and other Investment Representations. The
undersigned represents and warrants that the undersigned is an “accredited
investor” as defined in Rule 501(a) of Regulation D under the 1933 Act and that
the undersigned has accurately completed the Accredited Investor Certification,
which precedes the signature page to this Subscription Agreement.
Section 2.5 Restrictions on Transfer.
(a) The undersigned understands and agrees that because the offer and sale of
the Note subscribed for herein have not been registered under federal or state
securities laws, the Note (including any securities issuable upon conversion
thereof) acquired may not at any time be sold or otherwise disposed of by the
undersigned unless it is registered under the 1933 Act or there is applicable to
such sale or other disposition one of the exemptions from registration set forth
in the 1933 Act, the rules and regulations of the SEC thereunder and applicable
state law. The undersigned further understands that the Company has no
obligation or present intention to register the Note (including any securities
issuable upon conversion thereof) or to permit its sale other than in strict
compliance with the 1933 Act, SEC rules and regulations thereunder, and
applicable state law. The undersigned recognizes that, as a result of the
aforementioned restrictions, there is no and will be no public market for the
Note subscribed for hereunder. The undersigned expects to hold the Note (and any
securities issuable upon conversion thereof) for an indefinite period and
understands that the undersigned will not readily be able to liquidate this
investment even in case of an emergency.

 

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(b) The Note (and the securities to be issued to the undersigned upon conversion
thereof) shall have endorsed thereon legends substantially as follows:
“THE SECURITIES REPRESENTED BY THIS PROMISSORY NOTE (AND THE SECURITIES INTO
WHICH IT IS CONVERTIBLE) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THESE SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNDER APPLICABLE
STATE SECURITIES LAWS.”
Section 2.6 Investment Risks. The undersigned represents that he, she or it has
read and understands all of the “Risk Factors” set forth in the Company’s most
recent Form 10-K and Form 10-Q on file with the SEC. Without limiting the
foregoing, the undersigned has such knowledge and experience in financial and
business matters that he, she or it is capable of evaluating the merits and
risks of an investment in the Note. The undersigned recognizes that the Company
is a development stage company with an extremely limited financial and operating
history, that the development of medical devices is difficult, time consuming,
and expensive, and that an investment in the Company involves very significant
risks. The undersigned further recognizes that (A) an investment in the Company
is highly speculative, (B) an investor may not be able to liquidate his, her or
its investment, (C) transferability of the Note is extremely limited, (D) in the
event of a disposition, the investor could sustain a loss of his, her or its
entire investment, (E) the Company will require significant additional financing
in order to continue its business, (F) the Company has never had any revenues
and may not have any significant revenues for the foreseeable future, and
(G) the Company intends to raise additional funds in the near future through the
sale of equity, and that any such sale below the conversion events set forth in
the Note may be on terms to investors that are more favorable than the terms to
the undersigned. The undersigned is capable of bearing the economic risks of an
investment in the Note, including, but not limited to, the possibility of a
complete loss of the undersigned’s investment, as well as limitations on the
transferability of the Note, which may make the liquidation of an investment in
the Note difficult or impossible for the indefinite future. The undersigned
acknowledges that legal advice has been provided to the Company by Womble
Carlyle Sandridge & Rice, PLLC, and that such law firm has neither provided
advice to the Subscriber nor performed any due diligence on the Subscriber’s
behalf. The undersigned acknowledges that he, she or it has been advised to seek
his, her or its own independent counsel from attorneys, accountants and other
advisors with respect to an investment in this offering.
Section 2.7 Residence. The undersigned, if a natural person, is a bona fide
resident of the state set forth in his or her address on the signature page to
this Subscription Agreement. The undersigned, if an entity, has its principal
place of business at the mailing address set forth on the signature page of this
Subscription Agreement.
Section 2.8 Investor Information; Survival of Representations and Warranties and
Covenants. The representations, warranties, covenants and agreements contained
in this Article 2 shall survive the date hereof. Any information that the
undersigned is furnishing to the Company in this Subscription Agreement is
correct and complete as of the date of this Subscription Agreement and if there
should be any material change in such information prior to his, her or its
admission as a shareholder of the Company, the undersigned will immediately
furnish such revised or corrected information to the Company.
Section 2.9 Due Organization. If the undersigned is a corporation, partnership
or limited liability company, the undersigned is duly organized, validly
existing and in good standing under the jurisdiction of its organization, has
all requisite power and authority to own, lease and operate its properties, to
carry on its business as currently being conducted, to enter into this
Subscription Agreement and to perform its obligations hereunder and thereunder.

 

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Section 2.10 Due Authorization. If the undersigned is a corporation, partnership
or limited liability company, the execution, delivery and performance by the
undersigned of this Subscription Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the undersigned.
Section 2.11 Capacity. If the undersigned is an individual, the undersigned has
the capacity to execute, deliver and perform this Subscription Agreement.
Section 2.12 Enforceability. This Subscription Agreement will be, upon its
execution and delivery, a valid and binding obligation of the undersigned,
enforceable against the undersigned in accordance with its terms.
Section 2.13 No Conflicts. Neither the execution, delivery or performance by the
undersigned of this Subscription Agreement, nor the consummation by the
undersigned of the transactions contemplated hereby will (A) conflict with or
result in a breach of any provision of the undersigned’s certificate of
incorporation, bylaws or other organizational documents, (B) cause a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any agreement, instrument or
obligation to which the undersigned is a party or (C) violate any law, statute,
rule, regulation, judgment, order, writ, injunction or decree of any court,
administrative agency or governmental body, in each case applicable to the
undersigned or its properties or assets.
Section 2.14 No Approvals. No filing with, and no permit, authorization, consent
or approval of, any person (governmental or private) is necessary for the
consummation by the undersigned of the transactions contemplated by this
Subscription Agreement.
Section 2.15 Brokerage Commissions and Finders’ Fees. Neither the undersigned
nor anyone acting on the undersigned’s behalf has taken any action which has
resulted, or will result, in any claims for brokerage commissions or finders’
fees by any person in connection with the transactions contemplated by this
Subscription Agreement.
ARTICLE 3
COMPANY REPRESENTATIONS AND WARRANTIES
The Company makes the following representations and warranties with the intent
that the same may be relied upon by the undersigned:
Section 3.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the jurisdiction of its
organization, has all requisite power and authority to own, lease and operate
its properties, to carry on its business as currently being conducted, to enter
into this Subscription Agreement and to perform its obligations hereunder.
Section 3.2 Due Authorization. The execution, delivery and performance by the
Company of this Subscription Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company.
Section 3.3 Enforceability. This Subscription Agreement is, or upon its
execution and delivery will be, a valid and binding obligation of the Company,
enforceable against the Company in accordance with its respective terms.
Section 3.4 No Conflicts. Neither the execution, delivery or performance by the
Company of this Subscription Agreement, nor the consummation by the Company of
the transactions contemplated hereby, will (A) conflict with or result in a
breach of any provision of the Company’s certificate of incorporation or
by-laws, (B) cause a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any agreement, instrument or obligation to which the Company is a party or
(C) violate any law, statute, rule, regulation, judgment, order, writ,
injunction or decree of any court, administrative agency or governmental body,
in each case applicable to the Company or its properties or assets.

 

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Section 3.5 No Approvals. Assuming the accuracy of the representations and
warranties contained in Article 2, no filing with, and no permit, authorization,
consent or approval of, any person (governmental or private) is necessary for
the consummation by the Company of the transactions contemplated by this
Subscription Agreement, other than filings under Federal and state securities
laws.
ARTICLE 4
MISCELLANEOUS PROVISIONS
Section 4.1 Notices and Addresses. All notices required to be given under this
Subscription Agreement shall be in writing and shall be mailed by certified or
registered mail, hand delivered or delivered by next business day courier. Any
notice to be sent to the Company shall be mailed to the principal place of
business of the Company or at such other address as the Company may specify in a
notice sent to the undersigned in accordance with this Section. All notices to
the undersigned shall be mailed or delivered to the address set forth on the
signature page to this Subscription Agreement or to such other address as the
undersigned may specify in a notice sent to the Company in accordance with this
Section. Notices shall be effective on the date three days after the date of
mailing or, if hand delivered or delivered by next day business courier, on the
date of delivery; provided, however, that notices to the Company shall be
effective upon receipt.
Section 4.2 Governing Law; Jurisdiction. (A) THIS SUBSCRIPTION AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF FLORIDA WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES, (B) THE
UNDERSIGNED HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FLORIDA STATE
COURT OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF FLORIDA, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT
OR ANY AGREEMENT CONTEMPLATED HEREBY, AND (C) THE UNDERSIGNED HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD
AND DETERMINED IN SUCH FLORIDA STATE OR FEDERAL COURT. THE UNDERSIGNED FURTHER
WAIVES ANY OBJECTION TO VENUE IN SUCH COURT AND ANY OBJECTION TO AN ACTION OR
PROCEEDING IN SUCH COURT ON THE BASIS OF A NON-CONVENIENT FORUM. THE UNDERSIGNED
FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE COMPANY SHALL
BE BROUGHT IN SUCH COURTS. THE UNDERSIGNED AGREES TO WAIVE ITS RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.
Section 4.3 Assignability. This Subscription Agreement and the rights, interests
and obligations hereunder are not transferable or assignable by the undersigned
and the undersigned acknowledges and agrees that any transfer or assignment of
the Note shall be made only in accordance with all applicable laws.
Section 4.4 Successors and Assigns. This Subscription Agreement shall be binding
upon and inure to the benefit of the parties hereto, and each of their
respective legal representatives and permitted successors.
Section 4.5 Counterparts. This Subscription Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which shall constitute one instrument.
Section 4.6 Modifications to Be in Writing. This Subscription Agreement,
together with the Note and Warrant, constitutes the entire understanding of the
parties hereto with respect to the subject matter hereof and no amendment,
restatement, modification or alteration will be binding unless the same is in
writing signed by the party against whom any such amendment, restatement,
modification or alteration is sought to be enforced.
Section 4.7 Captions. The captions are inserted for convenience of reference
only and shall not affect the construction of this Subscription Agreement.

 

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Section 4.8 Validity and Severability. If any provision of this Subscription
Agreement is held invalid or unenforceable, such decision shall not affect the
validity or enforceability of any other provision of this Subscription
Agreement, all of which other provisions shall remain in full force and effect.
Section 4.9 Statutory References. Each reference in this Subscription Agreement
to a particular statute or regulation, or a provision thereof, shall be deemed
to refer to such statute or regulation, or provision thereof, or to any similar
or superseding statute or regulation, or provision thereof, as is from time to
time in effect.
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Accredited Investor Certification
YOU MUST BE ABLE TO CHECK OFF AT LEAST ONE OF THE BOXES BELOW IN ORDER TO
PURCHASE THE NOTE.

  o  
The undersigned is a natural person who had individual income of more than
$200,000 in each of the most recent two years or joint income with his spouse in
excess of $300,000 in each of the most recent two years and reasonably expects
to reach that same income level for this year; “income”, for purposes hereof,
should be computed as follows: individual adjusted gross income, as reported (or
to be reported) on a federal income tax return, increased by (a) any deduction
of long-term capital gains under section 1202 of the Internal Revenue Code of
1986 (the “Code”), (b) any deduction for depletion under Section 611 et seq. of
the Code, (c) any exclusion for interest under Section 103 of the Code and
(d) any losses of a partnership as reported on Schedule E of Form 1040;
    o  
The undersigned is a natural person whose individual net worth (i.e., total
assets in excess of total liabilities), or joint net worth with his spouse, will
at the time of purchase of the Note be in excess of $1,000,000;
    o  
The undersigned is a corporation, Massachusetts or similar business trust,
partnership, or limited liability company, or any organization described in
Section 501(c)(3) of the Internal Revenue Code, not formed for the specific
purpose of acquiring the Note, with total assets in excess of $5,000,000;
    o  
The undersigned is a trust (other than a revocable grantor trust), which trust
has total assets in excess of $5,000,000, which is not formed for the specific
purpose of acquiring the Note offered hereby and whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D and who
has such knowledge and experience in financial and business matters that he is
capable of evaluating the risks and merits of an investment in the Note;
    o  
The undersigned is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, and either: (a) the investment
decision will be made by a plan fiduciary, as defined in Section 3(21) of such
act, which is either a bank, insurance company, or a registered investment
adviser; or (b) the employee benefit plan has total assets in excess of
$5,000,000; or (c) the employee benefit plan is a self-directed plan, including
an Individual Retirement Account, with the meaning of Title I of such act, and
the person directing the purchase is an Accredited Investor**;
    **  
NOTE. If the undersigned is relying solely on this item for its Accredited
Investor status, please print the name of the person directing the purchase in
the following space and furnish a completed and signed Accredited Investor
Certification for such person.
    o  
The undersigned is an investor otherwise satisfying the requirements of
Section 501(a)(1), (2) or (3) of Regulation D promulgated under the 1933 Act,
which includes, but is not limited to, a self-directed employee benefit plan
where investment decisions are made solely by persons who are “accredited
investors” as otherwise defined in Regulation D;
    o  
The undersigned is a member of the Board of Directors or an executive officer of
the Company; or
    o  
The undersigned is an entity (including an IRA or revocable grantor trust but
other than a conventional trust) in which all of the equity owners meet the
requirements of at least one of the above subparagraphs.

 

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SUBSCRIPTION AGREEMENT
COUNTERPART SIGNATURE PAGE
If the subscriber is an INDIVIDUAL, or if purchased as JOINT TENANTS, as TENANTS
IN COMMON, or a COMMUNITY PROPERTY:

                Parker H. Petit   Social Security Number
 
       
/s/: Parker H. Petit
              Signature of subscriber   Signature of subscriber
 
       
September 22, 2009
  Address:   300 Colonial Center Parkway, Suite 130
 
       
Date
      Roswell, GA 30076
 
       

SUBSCRIPTION ACCEPTED AND AGREED TO this 22nd day of September 2009.
MiMedx Group, Inc.

              By:   /s/: Michael J. Culumber              
 
  Name:   Michael J. Culumber    
 
           
 
  Title:   Chief Financial Officer