LOAN AGREEMENT

 

This Loan Agreement, dated as of September 26, 2019 (this “Agreement”), is
entered into by and between H-CYTE Inc., a Nevada corporation (the “Company”)
and Horne Management, LLC, an entity controlled by the Chief Executive Officer
of the Company, (“Lender”).

 

RECITALS

 

WHEREAS, the Company believes that it is in the best interest of the Company to
obtain a short-term loan; and

 

WHEREAS, Lender is willing and able to provide the Company with a short-term
loan;

 

NOW THEREFORE, BE IT RESOLVED, that Lender shall provide to the Company a
short-term loan in the principal amount of $350,000, evidenced by the Promissory
Note (the “Note”) attached hereto as Exhibit A and subject to the provisions as
set forth in this Loan Agreement.

 

AGREEMENT

 

In consideration of the foregoing, and the representations, warranties and
conditions set forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1. The Note.

 

(a) Issuance of the Note. Subject to all of the terms and conditions hereof, the
Company agrees to issue and sell to Lender a Note in the principal amount of
$350,000 (the “Principal Amount”), which shall have a maturity date of March 26,
2020 (the “Maturity Date”) and accrue interest at the rate of twelve percent
(12%) per annum (the “Interest Rate”).

 

(b) Interest Rate Increase. If the Company does not pay the Principal Amount and
any and all accrued but unpaid interest by the Maturity Date, then the Interest
Rate shall increase from 12% to 15% from the Maturity Date onwards.

 

(c) Warrant. If the Company does not pay the Principal Amount and any and all
accrued but unpaid interest by November 26, 2019, the sixtieth day after the
Issuance Date (as defined in the Note), then the Company shall issue to Lender a
three-year warrant to purchase 400,000 shares of the Company’s common stock at a
purchase price of $0.75 per share.

 

2. Representations and Warranties of the Company. The Company represents and
warrants to Lender that:

 

(a) Due Incorporation, Qualification, etc. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada; (ii) has the power and authority to own, lease and operate its
properties and carry on its business as now conducted or as currently
contemplated to be conducted; and (iii) is duly qualified, licensed to do
business and in good standing as a foreign limited liability company in each
jurisdiction where the failure to be so qualified or licensed could reasonably
be expected to have a material adverse effect on the Company.

 

 

 

 

(b) Authority. The execution, delivery and performance by the Company of this
Agreement and the Note (the “Transaction Documents”) to be executed by the
Company (i) are within the power of the Company and (ii) have been duly
authorized by all necessary actions on the part of the Company, as required.

 

(c) Enforceability. Each Transaction Document executed, or to be executed, by
the Company has been, or will be, duly executed and delivered by the Company and
constitutes, or will constitute, a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors’ rights generally and general
principles of equity.

 

(d) Non-Contravention. The execution and delivery by the Company of the
Transaction Documents executed by the Company and the performance and
consummation of the transactions contemplated thereby do not and will not (i)
violate the Company’s Articles of Organization or By-laws (as of the date of
this Agreement, the “Charter Documents”) or any judgment, order, writ, decree,
statute, rule or regulation applicable to the Company; (ii) violate any
provision of, or result in the breach or the acceleration of, or entitle any
other any Person to accelerate (whether after the giving of notice or lapse of
time or both), any material mortgage, indenture, agreement, instrument or
contract to which the Company is a party or by which it is bound; or (iii)
result in the creation or imposition of any Lien upon any property, asset or
revenue of the Company (other than any Lien arising under the Transaction
Documents) or the suspension, revocation, impairment, forfeiture, or nonrenewal
of any material permit, license, authorization or approval applicable to the
Company, its business or operations, or any of its assets or properties. For the
purposes of this Agreement, “Person” shall mean any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934,
as amended (the “Exchange Act”). For purposes of this Agreement, “Lien” shall
mean any lien, pledge, charge, claim, mortgage, restriction on transfer,
security interest or other encumbrance of any sort.

 

(e) Approvals. No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority or other Person
(including, without limitation, the shareholders, interest holders, managers,
directors or other representatives or agents of any Person) is required in
connection with the execution and delivery of the Transaction Documents executed
by the Company and the performance and consummation of the transactions
contemplated thereby, other than such as have been obtained and remain in full
force and effect and other than such qualifications or filings under applicable
securities laws as may be required in connection with the transactions
contemplated by this Agreement.

 

(f) No Violation or Default. The Company is not in violation of or in default in
any material respect with respect to (i) its Charter Documents or any judgment,
order, writ, decree, statute, rule or regulation applicable to such Person; or
(ii) any mortgage, indenture, agreement, instrument or contract to which such
Person is a party or by which it is bound (nor is there any waiver in effect
which, if not in effect, would result in such a violation or default).

 

(g) Litigation. To the Knowledge of the Company, no actions (including, without
limitation, derivative actions), suits, proceedings or investigations are
pending or threatened against the Company at law or in equity in any court or
before any other governmental authority that (i) if adversely determined would
(alone or in the aggregate) result in a material liability or (ii) seek to
enjoin, either directly or indirectly, the execution, delivery or performance by
the Company of the Transaction Documents or the transactions contemplated
thereby. For purposes of this Agreement, “Knowledge” shall mean, with respect to
the Company, the actual knowledge of its officers and board members, after due
and diligent inquiry.

 

(h) Title. The Company owns and has good and marketable title in fee simple
absolute to, or a valid leasehold interest in, all real properties and good
title to other material assets and material properties owned or leased by the
Company as of the date hereof and set forth on Schedule 2(h) attached hereto.
Such assets and properties are subject to no Lien other than any Lien arising or
permitted under the Transaction Documents.

 

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(i) Indebtedness. The Company has no Indebtedness that is not reflected in the
Company’s filings with the Securities and Exchange Commission. For purposes of
this Agreement, “Indebtedness” shall mean all liabilities and obligations,
including any applicable penalties (including with respect to any prepayment
thereof), interest and premiums, without duplication, (a) for borrowed money;
(b) evidenced by notes, bonds, debentures, letters of credit or similar
instruments; (c) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business); or
(d) under capital leases.

 

(j) Accuracy of Information Furnished. None of the representations and
warranties made in this Agreement and none of the statements made in the
Transaction Documents or in the other certificates, statements, schedules,
exhibits or other documents furnished to Lender by or on behalf of the Company
in connection with the Transaction Documents or the transactions contemplated
thereby contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

(k) Compliance with Laws. The Company and all assets and properties of the
Company have materially complied with, are not in material violation of, and
have not received any notices of violation with respect to, any foreign,
federal, state or local statute, law or regulation.

 

3. Representations and Warranties of Lender. Lender represents and warrants to
the Company upon the acquisition of the Note as follows:

 

(a) Binding Obligation. Lender has full legal capacity, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement and the Transaction Documents constitute valid and binding
obligations of Lender, enforceable in accordance with their terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors’ rights generally and general
principles of equity.

 

(b) Accredited Investor. Lender is an “accredited investor” as defined under
Rule 501(a) of the Securities Act of 1933, as amended.

 

4. Conditions to Closing of Lender. Lender’s obligations pursuant to this
Agreement are subject to the fulfillment, to the reasonable satisfaction of
Lender, on or prior to the Closing Date, of all of the following conditions, any
of which may be waived in whole or in part by Lender:

 

(a) Representations and Warranties. The representations and warranties made by
the Company in Section 2 hereof shall have been true and correct when made, and
shall be true and correct on the Closing Date.

 

(b) Consents. The Company shall have received all consents and approvals and any
applicable waivers of any and all rights necessary for the execution by the
Company of this Agreement and the Transaction Documents.

 

(c) Governmental Approvals and Filings. The Company shall have obtained all
governmental approvals required in connection with the lawful sale and issuance
of the Note.

 

(d) Legal Requirements. At the Closing, the sale and issuance by the Company and
the purchase by Lender, of the Note shall be legally permitted by all laws and
regulations to which Lender or the Company are subject.

 

(e) Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Lender.

 

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(f) Transaction Documents. The Company shall have duly executed and delivered,
or shall have caused to be executed and delivered, to Lender the following
Transaction Documents:

 

  (i)   This Agreement (on the Initial Closing Date);

 

  (ii)   The Note;

 

  (iii)   Any other documents any Lender may reasonably request.

 

5. Conditions to Obligations of the Company. The Company’s obligation to issue
the Note is subject to the fulfillment, on or prior to the Closing Date, of the
following conditions, any of which may be waived in whole or in part by the
Company:

 

(a) Representations and Warranties. The representations and warranties made by
Lender in Section 3 hereof shall be true and correct when made, and shall be
true and correct on the Closing Date.

 

6. Miscellaneous.

 

(a) Waivers and Amendments. Any provision of this Agreement may be amended,
waived or modified only upon the written consent of the Company and Lender.

 

(b) Governing Law; Venue. This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, without giving effect to the conflicts of
laws principles thereof. The parties hereby submit to the exclusive jurisdiction
of the courts of the State of Florida and the federal courts of the United
States located in Tampa, Florida.

 

(c) Survival. The representations, warranties, covenants and agreements made
herein and in the Transaction Documents shall survive the execution and delivery
of this Agreement.

 

(d) Successors and Assigns. The rights and obligations of the Company and Lender
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties except that the Company shall not assign any of
its rights hereunder without the express written consent of Lender.

 

(e) Registration, Transfer and Replacement of the Note. The Note shall be
registered on the books and records of the Company. The Company will keep, at
its principal executive office, books for the registration and registration of
transfer of the Note. Prior to presentation of the Note, as the case may be, for
registration of transfer, the Company shall treat the Person in whose name a
given Note is registered as the owner and holder of the Note for all purposes
whatsoever, whether or not the Note shall be overdue, and the Company shall not
be affected by notice to the contrary. Subject to any restrictions on or
conditions to transfer set forth in the Note, Lender, at its option, may in
person or by duly authorized attorney surrender the same for exchange at the
Company’s chief executive office, and promptly thereafter and at the Company’s
expense, except as provided below, receive in exchange therefor one or more new
Note(s), and with respect to the a given Note, each in the principal requested
by Lender, dated the date to which interest shall have been paid on the Note so
surrendered or, if no interest shall have yet been so paid, dated the date of
the Note so surrendered and registered in the name of such Person or Persons as
shall have been designated in writing by such holder or its attorney for the
same principal amount as the then unpaid principal amount of the Note so
surrendered. Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of the
Note and (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it; or (b) in the case of mutilation, upon surrender thereof,
the Company, at its expense, will execute and deliver in lieu thereof a new Note
executed in the same manner as the Note being replaced, with the Note in the
same principal amount as the unpaid principal amount of the Note and dated the
date to which interest shall have been paid on the Note or, if no interest shall
have yet been so paid, dated the date of the Note.

 

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(f) Assignment. The rights, interests or obligations hereunder may not be
assigned, by operation of law or otherwise, in whole or in part, by the Company
without the prior written consent of Lender. The rights, interests or
obligations hereunder may be assigned by operation of law or otherwise, in whole
or in part, by Lender.

 

(g) Entire Agreement. This Agreement together with the other Transaction
Documents constitute and contain the entire agreement among the Company and
Lender and supersede any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether written or oral,
respecting the subject matter hereof.

 

(h) Notices. All notices, requests, demands, consents, instructions or other
communications required or permitted hereunder shall in writing and faxed,
mailed, emailed or delivered to each party as follows:

 

If to the Company:

H-CYTE, Inc.

201 E. Kennedy Blvd.

Suite 700

Att: Jeremy Daniel, CFO

 

If to Lender:

C/O - H-Cyte, Inc.

Attention: William E. Horne

 

(i) Expenses. All expenses incurred in connection with this Agreement and the
other Transaction Documents shall be the obligation of the party incurring such
fees and.

 

(j) Severability of this Agreement. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

(k) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument. A
facsimile, telecopy, .pdf scan or other reproduction of this Agreement may be
executed by one or more parties hereto and delivered by such party by facsimile
or any similar electronic transmission device pursuant to which the signature of
or on behalf of such party can be seen. Such execution and delivery shall be
considered valid, binding and effective for all purposes.

 

(Signature Page Follows)

 

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The parties have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the date and year first written
above.

 

  H-CYTE, INC.       By: /s/ Jeremy Daniel   Name: Jeremy Daniel   Title: Chief
Financial Officer

 

  LENDER         By: /s/ William E. Horne   Name: William E. Horne