Exhibit 10.2

 

Success Fee Letter

 

CytoSorbents Corporation

7 Deer Park Drive

Suite K

Monmouth Junction, NJ 08852

June 30, 2016

 

Bridge Bank, a division of Western Alliance Bank

12220 El Camino Real, Suite 100

San Diego, CA 92130

Attn: Bill Wickline

 

Ladies and Gentlemen:

 

Reference is herein made to that certain Loan and Security Agreement (the “Loan
Agreement”), dated as of even date herewith, by and between Western Alliance
Bank, an Arizona corporation (“Bank”), and CytoSorbents Corporation, a Delaware
corporation and CytoSorbents Medical, Inc., a Delaware corporation (individually
and collectively, jointly and severally “Borrower”). CytoSorbents Corporation
may be referred to herein as “Parent.” Capitalized terms used but not otherwise
defined herein shall have the respective meanings given to them in the Loan
Agreement. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by Borrower hereby agrees to pay to the Bank, an
amount equal to 6.37% of the original aggregate amount of Term Loans made under
the Loan Agreement (“Success Fee”), promptly upon the occurrence of the first
Liquidity Event (as defined herein) after the date hereof in accordance with the
payment instructions that the Bank may provide to Borrower following the receipt
of the Liquidity Event Notice.

 

As used herein:

 

“Liquidity Event” means any of the following: (a) a sale or other disposition by
either Borrower of all or substantially all of its assets; (b) a merger or
consolidation of either Borrower into or with another person or entity, where
the holders of such Borrower’s outstanding voting equity securities as of
immediately prior to such merger or consolidation hold less than a majority of
the issued and outstanding voting equity securities of the successor or
surviving person or entity as of immediately following the consummation of such
merger or consolidation; (c) a transaction or a series of related transactions
in which any “person” or “group” (within the meaning of Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of a sufficient number of shares of all classes of stock then
outstanding of either Borrower ordinarily entitled to vote in the election of
directors, empowering such “person” or “group” to elect a majority of the Board
of Directors of such Borrower, who did not have such power before such
transaction; or (d) the closing price per share for Parent’s common stock on
stock exchange where shares of Parent’s common stock are traded at the
applicable time, being $8.00 (after giving effect to any stock splits or
consolidations effected after the date hereof) or more for five successive
business days.

 

Borrower shall give Bank a written notice (“Liquidity Event Notice”) not less
than ten (10) days’ prior to the closing of the first Liquidity Event (described
in clauses (a) through (c) of the definition of Liquidity Event), and promptly
upon the occurrence of the first Liquidity Event described in clause (d) of the
definition of Liquidity Event, at the Bank’s address set forth above (or the
then current address of the Bank as advised by the Bank to Borrower in writing)
via certified mail or a reputable courier service. The Liquidity Event Notice
shall include Borrower’s then current address. Bank, upon receipt of the
Liquidity Event Notice, shall deliver to Borrower at its then current address as
set forth in the Liquidity Event Notice, payment instructions for the Success
Fee. If the Success Fee is pursuant to a Liquidity Event described in clause (d)
of the definition of the Liquidity Event, at the Borrower’s election, Parent
shall in lieu of paying the Success Fee in cash, issue and sell in exchange for
the Success Fee (and without any further consideration from the Bank) to the
Bank such number of registered shares of Parent’s common stock as would equal
the quotient (calculated by rounding up the nearest whole number) obtained by
dividing (a) the Success Fee by (b) the volume weighted average price per share
of Parent’s common stock for the same five successive business days on which the
closing price per share of Parent’s common stock caused the Success Fee to
become payable.

 

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The right of Bank to receive the Success Fee and the obligation of the Borrower
to pay the Success Fee hereunder shall terminate on June 30, 2021 but shall
survive the termination of the Loan Agreement and any prepayment of the Term
Loans.

  

    Very truly yours,           CYTOSORBENTS CORPORATION           By: /s/ Dr.
Phillip P. Chan     Name: Dr. Phillip P. Chan     Title: President and Chief
Executive Officer           CYTOSORBENTS MEDICAL, INC.

 

    By: /s/ Dr. Phillip P. Chan     Name: Dr. Phillip P. Chan     Title:
President and Chief Executive Officer       ACCEPTED AND AGREED:          
WESTERN ALLIANCE BANK    

 

By: /s/ Lindsay Schwallie     Name: Lindsay Schwallie     Title: Vice President
of Portfolio Management    

  

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