Unassociated Document


    EXHIBIT
      10.23

     

    REIMBURSEMENT
      AGREEMENT

     

    This
      Reimbursement Agreement (“Agreement”), dated as of December 18, 2007, is by
      and between Organic Farm Marketing, LLC (“Company”), a Wisconsin limited
      liability company, and Advanced Biotherapy, Inc. (“Investor”), a Delaware
      corporation.

     

    R
      E C I T A L S:

     

    A. Concurrently
      herewith, Investor is loaning to the Company the principal amount of Eight
      Hundred Thousand Dollars ($800,000.00), to be evidenced by a Company convertible
      note (“December Convertible Note”), pursuant to an agreement between the Company
      and the Investor of even date herewith (“Investment Agreement”). The Company
      agreed to secure its obligations under the December Convertible Note by a
      General Business Security Agreement of even date herewith (“Security
      Agreement”).

     

    B. The
      Wisconsin Department of Agriculture, Trade and Consumer Protection
      (“Department”) has required the Company to secure an irrevocable letter of
      credit in the amount of $1.0 million (“Letter of Credit”) in favor of the
      Department so that the Company may distribute dairy products in the State of
      Wisconsin.

     

    C. The
      Investor has arranged on behalf of the Company to obtain the Letter of Credit
      from The Northern Trust Company of Chicago, Illinois (“Bank”).

     

    D. As
      a
      condition to issuing the Letter of Credit, the Bank requires that the Investor
      grant the Bank a security interest in a certificate of deposit account
      maintained at the Bank as collateral for payment by the Company of funds
      advanced pursuant to the Letter of Credit (“Bank Pledge
      Agreement”).

     

    E. To
      induce
      the Investor to execute the Bank Pledge Agreement, the Company has agreed to
      enter into this Agreement and to issue a secured promissory note (“Secured
      Promissory Note”) in favor of the Investor of even date herewith which evidences
      the Company’s obligations to pay the Investor the amount which the Investor
      shall be obligated to pay the Bank pursuant to the Bank Pledge Agreement or
      otherwise, and to secure its obligation hereunder and thereunder by a General
      Business Security Agreement of even date herewith.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and the covenants
      contained herein, and to induce the Investor to lend its credit so that the
      Company may apply for the Letter of Credit, the parties agree as
      follows:

     

    SECTION
      1. DEFINITIONS.

     

    As
      used
      in this Agreement, the following terms shall have the indicated
      meanings:

     

    “Agreed
      Rate”
      means
      the rate of interest charged the Company by the Investor on any outstanding
      principal under the Secured Promissory Note.

     

    “Agreement”
      or
“Reimbursement
      Agreement”
means
      this Reimbursement Agreement, and all of the exhibits, appendices and schedules
      attached hereto, all of which are incorporated herein by this reference and
      made
      a part hereof.

     

    
      
        
        

      

      
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    “Bank”
means
      The Northern Trust Bank of Chicago, Illinois.

     

    “Date
      of Issuance”
means
      the date as of which the Letter of Credit is issued and delivered to the
      Department.

     

    “Default”
-
      See
      Section 7.

     

    “Department”
-
      See
      Recitals.

     

    “Draw”
or
      “Drawn”
with
      respect to the Letter of Credit means payment by the Bank on account of the
      Letter of Credit.

     

    “Events
      of Default”
means
      any condition or event stated in Sections 4.1 through 4.4 which, with the lapse
      of time or the giving of notice, or both, would constitute a
      Default.

     

    “Expiration
      Date”
means
      the date the Company’s obligations in connection with the Letter of Credit
      expire.

     

    “Investor”
-
      See
      Recitals.

     

    “L/C
      Certificates”
means
      those certain certificates required by the Bank from the Company.

     

    “Letter
      of Credit”
means
      that certain irrevocable letter of credit in the amount of One Million Dollars
      ($1,000,000.00), dated concurrently herewith, issued by the Bank with the
      Company as account party, and the Department as beneficiary, and such other
      letter of credit that may be issued in substitution or replacement
      thereof.

     

    “Lien”
means
      any lien, mortgage, pledge, security interest, charge or encumbrance of any
      kind
      (including any conditional sale or other title retention agreement, any lease
      in
      the nature thereof, and any agreement to give any lien or security
      interest).

     

    “Security
      Documents”
means,
      collectively, the General Business Security Agreement dated of even date
      herewith and all documents or instruments executed in connection
      therewith.

     

    “Units”
means
      five thousand (5,000) Units of the Company, representing a membership interest
      in the Company and such other rights, privileges and preferences as set forth
      in
      the Company’s Operating Agreement, made as of February 23, 2007, as amended
      by Certificate of Amendment to Operating Agreement dated April 17, 2007, and
      as
      amended by the Amendment to Operating Agreement dated concurrently herewith,
      and
      as otherwise provided under the laws of the State of Wisconsin.

     

    SECTION
      2. UNDERTAKING
      FOR LETTER OF CREDIT, REIMBURSEMENT AND OTHER PAYMENTS.

     

    2.1 Undertaking
      to Obtain Letter of Credit.
      The
      Company shall undertake and obtain the Letter of Credit from the Bank and to
      execute the L/C Certificates, and to execute all agreements, documents and
      instruments that may be necessary or desirable to obtain the Letter of
      Credit.

     

    
      
        
        

      

      
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    2.2 Reimbursement
      for Draw Upon Letter of Credit and Other Amounts.
      The
      Company hereby agrees (i) to pay the Investor the aggregate amount which
      the Investor shall pay to the Bank pursuant to or in connection with the Bank
      Pledge Agreement or otherwise, and any interest thereon at the Agreed Rate
      accruing from the date of advance or payment by the Investor, subject to and
      in
      accordance with the Secured Promissory Note; and (ii) to reimburse the
      Investor on demand for all costs, expenses, fees, of whatever kind and any
      liabilities or obligations paid or payable by the Investor to the Bank pursuant
      to or in connection with or arising from the Letter of Credit, the L/C
      Certificates or the Secured Promissory Note, including, without limitation,
      all
      origination and administration fees and attorneys’ fees and
      disbursements.

     

    2.3 Fees.
      The
      Company shall pay to the Investor a fee equal to ten percent (10%) of the face
      amount of the original Letter of Credit, payable as follows:

     

    (a) on
      the
      Date of Issuance, Fifty Thousand Dollars ($50,000.00), by cash or immediately
      available funds. The Company hereby agrees and authorizes the Investor to deduct
      from and retain for its own benefit, subject to the occurrence of the Date
      of
      Issuance, such $50,000 fee from the loan proceeds to be advanced to the Company
      under the Working Capital Loan at the closing as provided in the Investment
      Agreement; and

     

    (b) on
      the
      Date of Issuance, the Company shall issue the five thousand (5,000) Units to
      Investor, representing an agreed value per Unit of Ten Dollars ($10.00),
      together with a certificate in form satisfactory to the Investor. Concurrently
      with the issuance of such 5,000 Units, the Investor agrees to execute a Joinder
      Agreement pursuant to which the Investor agrees to be bound by the terms and
      conditions of the Operating Agreement as in effect on the date hereof, and
      any
      amendments thereto as to which the Investor has consented in writing.


     

    The
      Investor will maintain the Bank Pledge Agreement
      or make other arrangements suitable to the Bank to maintain the Letter of Credit
      for one year from the Date of Issuance. In the event the Letter of Credit shall
      be outstanding beyond December 31, 2008, and for any such additional period
      the
      Investor shall have an obligation to the Bank in connection with the Letter
      of
      Credit, the Company shall pay to the Investor a fee equal to Eight Thousand
      Three Hundred Thirty-Three Dollars and Thirty-Three Cents ($8,333.33) per month
      for each month, or portion thereof, in which the Letter of Credit is outstanding
      beyond December 31, 2008, payable in advance in cash or immediately available
      funds, provided that the Company shall not cause the Letter of Credit to be
      extended without the consent of the Investor.

     

    2.4 Application
      of Funds.
      Except
      as otherwise expressly provided herein, all payments received by the Investor
      from the Company shall be applied by the Investor to the payment of amounts
      then
      owing by the Company to the Investor, in such order and manner as the Investor
      chooses, in its sole discretion.

     

    SECTION
      3. CONDITIONS
      PRECEDENT.

     

    The
      Investor’s obligation to execute the Bank Pledge Agreement is conditioned upon
      the satisfaction by the Company of all of the following conditions on or prior
      to the Date of Issuance.

     

    
      
        
        

      

      
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    3.1 Execution
      and Delivery of Closing Documents.
      The
      Investor shall have received and approved the following documents, each of
      which
      shall be in form and substance satisfactory to the Investor and its legal
      counsel and duly executed and delivered by the appropriate parties
      thereto:

     

    (a) The
      Security Documents and all financing statements, notices, deliveries and
      instruments required in connection therewith; and

     

    (b) Such
      other documents and instruments as the Investor may reasonably
      require.

     

    3.2 Representations
      Correct; No Default.
      On the
      Date of Issuance:

     

    (a) the
      representations and warranties contained in the Investment Agreement delivered
      by the Company to the Investor shall be true and correct in all respects on
      and
      as of the Date of Issuance to the same extent as though made on and as of such
      date (except for representations and warranties expressly referring to a
      specific date which shall be true and correct as of such date);

     

    (b) no
      Event
      of Default or Default shall have occurred and be continuing, and neither will
      result from the issuance of the Letter of Credit.

     

    3.3 Units.
      The
      Company shall simultaneously cause to be delivered pursuant to Section 2.3
      hereof a certificate representing the five thousand (5,000) Units, or comparable
      evidence of the Investor’s ownership of record of the Units, satisfactory to the
      Investor.

     

    3.4 Fees.
      The
      Company shall have paid the cash fee to the Investor, specified in Section
      2.3(a).

     

    SECTION
      4. EVENTS
      OF DEFAULT.

     

    The
      following events shall be, at the option of the Investor, constitute a “Default”
hereunder:

     

    4.1 Payment
      of Obligations.
      The
      Company shall fail to pay when due any amount due to the Investor under this
      Agreement or under the Secured Promissory Note when due and such failure shall
      continue for five (5) days.

     

    4.2 Secured
      Promissory Note Event of Default.
      Any
      Event of Default (as that term is defined in the Secured Promissory Note) shall
      occur.

     

    4.3 Security
      Documents.
      There
      shall occur a default as described in any of the Security Documents

     

    4.4 Invalidity.
      Any
      payment obligation of the Company under this Agreement or any Security Document
      at any time for any reason ceases to be valid and binding thereon, or the
      validity or enforceability thereof shall be contested or denied by the Company
      or any governmental agency or authority.

     

    
      
        
        

      

      
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    SECTION
      5. RIGHTS
      AND REMEDIES.

     

    Upon
      the
      occurrence of a Default, the Investor shall have all rights and remedies under
      law or equity, including, without limitation:

     

    (a) All
      rights and remedies under this Agreement, the Secured Promissory Note and the
      Security Documents.

     

    (b) All
      remedies of the Investor provided for in this Agreement are cumulative and
      shall
      be in addition to any and all other rights and remedies available under the
      Secured Promissory Note or the Security Documents or by law or equity. No
      exercise by the Investor of any right or remedy shall in any way constitute
      a
      cure or waiver of any Event of Default or Default hereunder, or invalidate
      any
      act done pursuant to any notice of default, or prejudice the Investor in the
      exercise of any other right or remedy available to the Investor. No failure
      on
      the part of the Investor to exercise, and no delay in exercising, any right
      or
      remedy shall operate as a waiver or otherwise preclude enforcement of any of
      its
      rights and remedies; nor shall any single or partial exercise of any right
      or
      remedy preclude any further exercise thereof or of any other right or remedy.
      The Investor need not resort to any particular right or remedy before exercising
      or enforcing any other.

     

    SECTION
      6. NOTICES.

     

    All
      notices or demands of any kind shall be in writing and sent by telecopier (with
      evidence of transmission) or by reputable overnight courier (with evidence
      of
      delivery) addressed to the address specified below. Notice shall be deemed
      complete (i) if given by telecopier, on the first business day immediately
      following the date of transmission, and (ii) if given by overnight courier,
      on the date of delivery. The addresses specified in this section for notice
      are:

     

    
      	
              Investor:

            	
              Advanced
                Biotherapy, Inc.

              141
                West Jackson, Suite 2182

              Chicago,
                Illinois 60604

              Attention:
                Christopher W. Capps,

              Chief
                Executive Officer

              Facsimile: (312)
                427-5396

              with
                a copy to:

               

              Rutter
                Hobbs & Davidoff Incorporated

              1901
                Avenue of the Stars, Suite 1700

              Los
                Angeles, California 90067

              Attention: Joel
                Weinstein, Esq.

              Facsimile: (310)
                286-1728

            
	
              Company:

            	
              Organic
                Farm Marketing, LLC

              P.O.
                Box 560

              302
                West Stanley Street

              Thorp,
                Wisconsin 54771

              Attention: Chad
                L. Pawlak, Sr.

              Facsimile: (715)
                669-7583

               

              with
                a copy to:

               

              Whyte
                Hirschboeck Dudek SC

              33
                East Main Street, Suite 300

              Madison,
                Wisconsin 53703

              Attention: Lisa
                Lange, Esq.

              Facsimile: (608)
                258-7138

            


    

     

    
      
        
        

      

      
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    SECTION
      7. INDEMNIFICATION.

     

    Article
      VIII of the Investment Agreement is incorporated herein by reference as if
      set
      forth verbatim.

     

    SECTION
      8. LIABILITY
      OF INVESTOR GROUP.

     

    Without
      limiting any provision of Section 7 hereof, as between the Company and the
      Investor, the Company assumes all risks of the acts or omissions of the
      Department with respect to its use of the Letter of Credit and the Bank as
      to
      the issuance or dishonor of a draw upon the Letter of Credit; provided, however,
      this assumption is not intended to, and shall not, preclude the Company from
      pursuing such rights and remedies as it may have against the Bank or any Letter
      of Credit beneficiary at law or under any agreement. Neither the Investor nor
      any of its officers, directors, employees or agents shall be liable or
      responsible for: (a) the use made of the Letter of Credit for any acts or
      omissions of the Bank or any Letter of Credit beneficiary; (b) the
      validity, sufficiency or genuineness of any documents, or endorsements, even
      if
      such documents should in fact prove to be in any or all respects invalid,
      insufficient, fraudulent or forged; (c) payment by the Bank against
      presentation of documents which do not comply with the terms of the Letter
      of
      Credit, including failure of any documents to bear adequate reference to the
      Letter of Credit; or (d) any other circumstances in making or failing to
      make payment under the Letter of Credit.

     

    SECTION
      9. SUCCESSORS
      AND ASSIGNS.

     

    This
      Agreement is a continuing obligation and shall be binding upon the parties
      and
      their respective successors, transferees and assigns, and shall inure to the
      benefit of and be enforceable by the parties and their respective successors,
      transferees and assigns; provided, however, that the Company may not assign
      all
      or any part of this Agreement without the prior written consent of the Investor,
      in its sole discretion.

     

    SECTION
      10. MISCELLANEOUS.

     

    10.1 Governing
      Law.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of Delaware, without regard to its principles of conflict
      of laws.

     

    10.2 Survival
      of Warranties.
      All
      agreements, representations and warranties made in this Agreement and in any
      related certificates shall survive the execution and delivery of this Agreement
      and the issuance and expiration of the Letter of Credit.

     

    
      
        
        

      

      
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    10.3 Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provision or affecting the validity or enforceability of such provision in
      any
      other jurisdiction.

     

    10.4 Counterparts.
      This
      Agreement may be executed in any number of counterparts (and by facsimile,
      followed by delivery of an original), and by different parties on separate
      counterparts, each of which counterparts, when so executed and delivered, shall
      be deemed to be an original, and all of which counterparts, taken together,
      shall constitute but one and the same Agreement.

     

    10.5 Time
      of Essence.
      Time is
      of the essence of this Agreement and of each provision in which time is an
      element.

     

    10.6 No
      Further Credits.
      The
      Investor shall not be obligated to issue any further credits or any other manner
      to extend any financial consideration to the Company, except as expressly
      provided in this Agreement.

     

    10.7 Headings.
      Section
      and other headings in this Agreement are for convenience of reference only
      and
      shall not constitute a part of this Agreement for any other
      purpose.

     

    10.8 Independence
      of Covenants.
      All
      covenants hereunder shall be given independent effect so that if a particular
      action or condition is not permitted by any one of such covenants, the fact
      that
      it would be permitted by an exception to, or be otherwise within the limitations
      of, another covenant shall not avoid the occurrence of an Event of Default
      or
      Default if such action is taken or condition exists.

     

    10.9 Waivers.
      No
      waiver or consent under this Agreement shall be effective unless it is in
      writing and signed by the Investor. Each waiver or consent shall be effective
      only in the specific instance and for the specific purpose for which it was
      given.

     

    10.10 Compliance
      with Usury Laws.
      Notwithstanding any other provision of this Agreement, neither the Investor
      Group nor any Investor shall be required to pay interest and other cost or
      considerations that constitute inters under any applicable law which are
      contracted for, charged or received pursuant to this Agreement in an amount
      in
      excess of the maximum amount of interest allowed under any applicable law.
      That
      portion of any interest payment in excess of the maximum legal rate of interest,
      if any, provided for in this Agreement or related documents shall be canceled
      automatically as of the date of such acceleration, or if theretofore paid,
      credited to the principal amount.

     

    10.11 Entire
      Agreement.
      This
      Agreement and the other agreements and documents referred to herein or therein
      constitute the entire understanding between the parties and may not be modified,
      amended or terminated except by a written agreement signed by each of the
      parties hereto. The provisions of this Agreement are not intended to supersede
      the provisions of either the Investment Agreement or the Secured Promissory
      Note, but shall be construed as supplemental thereto.

     

    [SIGNATURES
      ON FOLLOWING PAGE]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
      or
      caused this Agreement to be duly executed and delivered by a duly authorized
      officer as of the date first above written.

     

    
      	
              “COMPANY”

            	
              ORGANIC
                FARM MARKETING, LLC

               

               

               

              By
                ______________________________________

              Chad
                L. Pawlak, Sr., President

               

               

               

            
	
              “INVESTOR”

            	
              ADVANCED
                BIOTHERAPY, INC.

               

               

               

              By
                ______________________________________

              Christopher
                W. Capps,

              Chief
                Executive Officer

            


    

     

    
      
        
        

      

      
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