Document:

Unassociated Document

 

July 14, 2011 

 

Cytomedix, Inc.

 

Re: Documents B&C 07142011a-d

 

	
  

	
1.

	
By entering into this transaction, you agree to take responsibility and accountability for the conversion terms of the agreements, and to honor the conversion terms as set forth in the agreements.

 

	
  

	
2.

	
Regarding Payments:

 

	
  

	
■

	
$600,000 will be paid to Borrower for Secured & Collateralized Promissory Note C-07142011a within 2 business days of execution and closing of this agreement.

 

	
  

	
■

	
$200,000 will be paid to Borrower for Secured & Collateralized Promissory Note C-07142011a within 60 days of execution and closing of this agreement provided the following conditions are met:

 

	
  

	
(a)

	
At the time of payment, there shall not exist an event of default as described within any of the agreements between Borrower and Holder.

 

	
  

	
(b)

	
At the time of payment, the total dollar trading volume of Borrower’s common stock for the previous 23 trading days must be equal to or greater than $500,000 (five hundred thousand US Dollars). The total dollar volume will be calculated by removing the one highest dollar volume day and summing the dollar volume for the remaining 22 trading days.

 

	
  

	
■

	
The Company understands and agrees that with regard to all documents Secured & Collateralized Promissory Note C-07142011a-d, other than the two payments described above, all payments that may be made prior to maturity are on a best efforts basis by JMJ, and that JMJ does not guarantee that it will make any payments prior to maturity. Any payments prior to maturity are solely at JMJ’s election.

 

	
  

	
3.

	
DWAC Electronic Transfer of Shares. If the Company loses its ability to electronically transfer shares via “DWAC/FAST” transfer, you agree that JMJ Financial may, at its election, indefinitely stall or cancel (without penalty or liability) any payments as set forth.

 

	
  

	
4.

	
Conversion Ceiling. The Holder has the right to enforce a conversion ceiling of $0.80 on any and all conversions under Document B-07142011a.

 

	
  

	
5.

	
Cancellation Provisions of B&C-0714201la-d:

 

  

  

  

 

	
  

	
■

	
Documents B&C-0714201la may not be cancelled.

 

	
  

	
■

	
In the event that the Holder both (a) elects to execute and make effective Documents B&C-07142011b and (b) enforces a conversion ceiling of $0.80 on Document B-07142011a, the Borrower may subsequently elect to cancel Documents B&C-07142011b within three days of Holder’s execution. In the event that the Borrower does cancel Documents B&C-07142011b, a 20% penalty/liquidated damages of $100,000 will be assessed and either added to the balance of a Note or paid in cash (form of payment is at Borrower’s election, and in the case of adding the $100,000 to the balance of a Note, it is under Holder’s and Borrower’s expectation that the fee/liquidated damages will tack back to the original date of the Note for purposes of Rule 144). Borrower may only cancel Documents B&C-0714201lb if both the $0.80 conversion ceiling is enforced and Documents B&C-07142011b are executed by Holder.

 

	
  

	
■

	
In the event that the Holder elects to execute and make effective any of Documents B&C-07142011c-d, the Borrower may subsequently elect to cancel those executed documents within three days of Holder’s execution at no fee.

 

	 	
6. 

	
No Conflicts and No Inconsistent Agreements;

 

(a)           No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected.

 

(b)           No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

 

  

  

  

 

	
BORROWER[S]:

	  	  
	  	  	  
	
/s/ Martin Rosendale 14 JULY 2011

	  	
/s/ David Jorden 7/14/2011

	
Martin Rosendale

	  	
David Jorden

	
CEO

	  	
Director

	
Cytomedix, Inc.

	  	
Cytomedix, Inc.

	  	  	  
	
LENDER/HOLDER:

	  	  
	  	  	  
	

	  	  
	
JMJ Financial / Its Principal

	  	  

 

  

  

  

 

ADDITIONAL DEFAULT PROVISIONS

 

July 14, 2011

 

Document References: 

 

Documents B&C-07142011a-d

 

Default. In the event that (i) the Borrower shall fail to pay any principal under this Note when due and payable (or payable by conversion) hereunder; or (ii) the Borrower shall fail to pay any interest or any other amount under this Note when due and payable (or payable by conversion) hereunder; or (iii) a receiver, trustee or other similar official shall be appointed over the Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or (iv) the Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or (v) the Borrower shall make a general assignment for the benefit of oreditors; or (vi) the Borrower shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an involuntary proceeding shall be commenced or filed against the Borrower; or (viii) the Borrower shall lose its ability to electronically transfer shares by “DWAC/FAST” transfer; or (ix) the Borrower shall lose its status as “DTC Eligible”; or the borrower’s shareholders shall lose the ability to deposit (either electronically or by physical certificates, or otherwise) shares into the DTC System; or (x) the Borrower shall become delinquent in its filing requirements as a fully-reporting issuer registered with the Securities & Exchange Commission; (each event specified in clauses (i) through (x) above, an “Event of Default”); then, in the case of any of the events specified in clauses (i) through (x) above, the outstanding principal amount under this Note, together with accrued and unpaid interest thereon, and all other amounts payable by Borrower under this Note, shall become immediately due and payable without any action on the part of the Lender. Borrower waives demand, presentment, protest, notice of protest, dishonor, notice of dishonor or any other notice of any kind.

	
/s/ Martin Rosendale 14 July 2011

	  	
/s/ David Jorden 7/14/2011

	
Martin Rosendale

	  	
David Jorden

	
CEO

	  	
Director

	
Cytomedix, Inc.

	  	
Cytomedix, Inc.

	  	  	  
	  	  	  
	

	  	  
	
JMJ Financial

	  	  
	
Its PrincipalUnassociated Document

 

SECURED & COLLATERALIZED PROMISSORY NOTE

$1,300,000 PLUS INTEREST DUE & PAYABLE

DOCUMENT C-07142011a

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD. OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

 

FOR VALUE RECEIVED, on the Effective Date, as defined below, JMJ Financial (the “Borrower,” or “Writer”), hereby promises to pay to the Lender (“Lender” or “ Holder”), as defined below, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.

 

	
The “Holder” shall be:

	  	
Cytomedix, Inc.

	  	  	  
	
The “Principal Sum” shall be:

	  	
$1,300,000 (one million three hundred thousand US Dollars); Subject to the following: accrued, unpaid interest shall be added to the Principal Sum.

	  	  	  
	
The “Consideration” shall be:

	  	
$1,300,000 (one million three hundred thousand US dollars) in the form of this $1,300,000 Secured & Collateralized Promissory Note as memorialized and evidenced by the attached Exhibit A Collateral and Security Agreement.

	  	  	  
	
The “Interest Rate” shall be:

	  	
4% one-time interest charge on the Principal Sum. No interest or principal payments are required until the Maturity Date, but both principal and interest may be prepaid prior to maturity date.

	  	  	  
	
The “Recourse” terms shall be:

	  	
This is a full recourse Note such that, for example, if the Writer defaults on the payment of this Note, forcing the Holder to foreclose on the security/collateral and there is a deficiency between (1) the outstanding principal and interest amount and (2) the foreclosure liquidation amount; then the Holder has the right to pursue additional claims against the Writer for that deficiency.

	  	  	  
	
The “Collateral” or “Security” shall be:

	  	
$1,300,000 worth of money market fund (or similar equivalent), or $1,300,000 worth of any other assets, as memorialized and evidenced by the attached Exhibit A Collateral and Security Agreement.

	  	  	  
	
The “Maturity Date” is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:

	  	
Three years from the Effective Date, as defined below on the signature page.

	  	  	  
	
The “Prepayment Terms” shall be:

	  	
Prepayment is permitted at any time by payment in the form of any of the following: (1) cash, or (2) other negotiated form of payment mutually agreed to in writing, or (3) by surrender of the Convertible Promissory Note Document B-07142011a, or (4) by surrender of the Collateral or Security with which this Promissory Note is secured.

 

  

  

  

 

ARTICLE 1 PAYMENT-RELATED PROVISIONS

 

1.1  Loan Payment Schedule. While no principal or interest payments are required until the Maturity Date, unless otherwise adjusted by Writer with written notice to Holder, or unless otherwise prepaid as set forth above whereby prepayment is permitted at any time by payment of cash, or other mutually agreed and negotiated payment, or by surrender of the Convertible Promissory Note Document B-07142011a, or by surrender of the Collateral or Security related hereto; provided that all conversions are honored as set forth under Convertible Promissory Note Document B-0714201la and provided that Rule 144 is available to remove the restrictive legend from those shares obtained in those conversions and such that the shares effectively become immediately freely tradable, Writer will plan to make payments in total monthly amounts of $150,000 beginning 210 days from the execution of this agreement. Writer reserves the right to (1) make payments prior to 210 days from the execution of this agreement, and (2) to make payments in monthly amounts in excess of $150,000, and (3) to adjust this payment schedule and payment amounts with written notice to Holder. Please note: The $150,000 figure is based on recent liquidity, and is subject to change based on change in liquidity.

 

1.2  Interest Rate, Interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.

 

1.3  Application of Payment. Unless otherwise specified in writing by Writer, all payments made on this Note will be first applied to the Principal Sum.

 

ARTICLE 2 MISCELLANEOUS

 

2.1.  Notices. Any notice required or permitted hereunder must be in writing and be either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.

 

2.2.  Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

2.3.  Assignability. This Note will be binding upon the Writer and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder only with written consent by Writer.

 

2.4.  Governing Law. This Agreement will be governed by, and construed and enforced in accordance, with the laws of the State of Florida, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

 

  

  

  

 

2.5.  Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Writer.

 

2.6.  Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.

 

2.7.  No Public Announcement. Except as required by securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Writer and Holder.

 

2.8.  Transfer, Pledge, Sale, Collateral, Offer. Holder may not transfer, pledge, sell, use as collateral, offer, or hypothecate this Note to any third party without written approval from Writer.

 

2.9.  Effective Date. This Note will become effective only upon occurrence of the two following events: Execution by both parties, delivery of Document B-07142011a by the Writer.

 

HOLDER:

	
/s/ David Jorden 7/14/11

	 	
/s/ Martin Rosendale 14 July 2011

	
David Jorden

	 	
Martin Rosendale

	
Director

	 	
CEO

	
Cytomedix, Inc.

	 	
Cytomedix, Inc.

	
WRITER:

	  
	

	
  

	
JMJ Financial / Its Principal

 

EFFECTIVE DATE AS EXECUTED BY WRITER: 7/15/2011

NOTARY FOR SIGNATURE BY WRITER:

 

  

  

  

 

EXHIBIT A

COLLATERAL & SECURITY AGREEMENT

 

1.  Security Interest. Writer hereby grants to Holder a security interest in the following described property (“Security” or “Collateral” or “Security Interest”):

 

$1,300,000 worth of money market fund (or similar equivalent), or $1,300,000 worth of any other assets

 

This Collateral and security interest will secure the payment and performance of the Writer’s Secured & Collateralized Promissory Note Document C-07142011a in the amount of $1,300,000 (one million three hundred thousand US Dollars).

 

2.    Warranties and Covenants of Writer. Writer makes the following warranties and covenants to Holder:

 

(A)  Writer is the sole owner of the Collateral free from any lien, security interest, or encumbrance, and Writer will defend the Collateral against all claims and demands of all parties at any time claiming interest therein.

 

(B)   This Collateral has not been pledged, assigned, or hypothecated for any other purpose, and no financing statement is on file in any local, state, or federal institution, bureau, government, or public office.

 

(C)   While the principal and interest balance of the Secured & Collateralized Promissory Note Document C-07142011a remains outstanding, Writer will not transfer, sell, offer to sell, assign, pledge, liquidate, spend, or otherwise transfer to any party an amount of the Collateral equal to or greater than the outstanding balance of the Secured & Collateralized Promissory Note Document C-07142011a.

 

(D)   Writer will pay promptly when due all taxes, expenses, and assessments upon the Collateral.

 

3.  Perfection. Holder has the right, upon its election, to perfect the Collateral and security and this Collateral and Security Agreement by filing a financing statement or like instrument with its proper local, state, or federal institution, bureau, government, or public office. Holder is encouraged to perfect this instrument, and Writer will reasonably assist in Holder’s doing so.

 

4.  Remedies Upon Default. In the event of Writer’s default on the Secured & Collateralized Promissory Note Document C-07142011a, Holder may declare all obligations secured hereby immediately due and payable and shall have the remedies of a secured party, including without limitation the right to take immediate and exclusive possession of the Collateral or any part thereof, or to obtain a court order to do so; and the Writer must surrender the security and Collateral to the Holder within 5 (five) business days of receiving written notice that Holder is taking possession of the Collateral as remedy of default.

 

  

  

  

 

5.  Normal Course of Business. Provided that no default has occurred on the Secured & Collateralized Promissory Note Document C-07142011a, Writer will use and possess the Collateral in the normal course of business. Further, Writer may liquidate, transfer, or exchange the Collateral into another viable investment vehicle with equal or greater value, including but not limited to bonds, money market funds, mutual funds, other stocks, or private placement convertible promissory notes or other investment vehicles. However, any liquidation, transfer, or exchange into another viable investment vehicle will not affect Holder’s security, rights, or claims to the underlying Collateral. At any time upon Holder’s request, Writer will promptly provide update on the investment vehicle placement of this Collateral.

 

6.  Termination of Security. At the time of prepayment or payoff of the Secured & Collateralized Promissory Note Document C-07142011a to Holder by Writer, Holder’s security interest in this Collateral shall automatically terminate. In the event that the Collateral and security interest were perfected by Holder as set forth in Section 3, upon termination of security as set forth in this section 6, the Holder will withdraw any and all perfection instruments on the collateral and security within 5 (five) business days.

 

7.  Governing Law. This Agreement will be governed by, and construed and enforced in accordance, with the laws of the State of Florida, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Florida or in the federal courts located in Miami-Dade County, in the State of Florida. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts.

 

8.  No Public Announcement. No public announcement may be made regarding this Collateral & Security Agreement without written permission by both Writer and Holder. In the event that any securities law requires this document, to be filed publicly, all information regarding description of the Collateral that is considered personal financial information shall be struck out with <<<CONFIDENTIAL>>> and listed as follows:

 

$1,300,000 worth of <<<CONFIDENTIAL>>> money market fund (or similar equivalent), or $1,300,000 worth of any other assets

 

9.  Effective Date. This agreement will become effective as set forth in Section 2.9 of Secured & Collateralized Promissory Note Document C-07142011a.

 

HOLDER:

	
/s/ David Jorden 7/14/11

	  	
/s/ Martin Rosendale 14 July 2011

	
David Jorden

	  	
Martin Rosendale

	
Director

	  	
CEO

	
Cytomedix, Inc.

	  	
Cytomedix, Inc.

	
WRITER:

	  
	  	  
	

	  
	
JMJ Financial / Its Principal

	  

 

EFFECTIVE DATE AS EXECUTED BY WRITER: 7/15/2011

NOTARY FOR SIGNATURE BY WRITER:

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