Document:

Unassociated Document

    
      

    

    Exhibit 10.2

    
      

      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

       

      3%
CONVERTIBLE SENIOR SECURED PROMISSORY NOTE

       

      
        
          
            
              
                
                  
                    
                      
                        	
                                $

                              	 
      	 
      	 
      	
                                ,
      2009

                              

                      

                    

                  

                

              

            

          

        

      

      

      

      For value
received MiMedX  Group, Inc.,
a Florida corporation (the “Company”),
promises to pay to __________________
(“Holder”)
the principal sum of ____________________ ($________), together with simple
interest on the outstanding principal amount at the rate of three percent (3.0%)
per annum. The principal and all accrued interest shall be due and payable in
full on April __, 2012 (the “Maturity
Date”). This Note is secured by a security interest in certain Collateral
(the “Collateral”),  as
defined in, and subject to the terms of, that certain Security and Intercreditor
Agreement of even date herewith (the “Security
Agreement”).  Interest shall begin to accrue on the date hereof
and shall continue to accrue on the outstanding principal amount hereof until
converted into common stock of the Company (the “Common
Stock”) as provided herein, or until the payment in full of this Note
whichever occurs first.  Interest shall be computed on the basis of a
year of 365 days for the actual number of days elapsed.  All cash
payments of interest hereunder shall be in lawful money of the United States of
America.  Upon payment in full of the amount of all principal and
interest payable hereunder (whether in cash or Common Stock upon a Conversion
Event, as defined below),  this Note shall be surrendered to the
Company for cancellation.

       

      1.         
  This Note is issued pursuant to that certain 3% Convertible Senior
Secured Promissory Note Subscription Agreement dated as of April __, 2009, (the
“Note
Subscription  Agreement”), and is subject to its terms and
conditions. However, in the event of any conflict between the terms of this Note
and the Note Subscription Agreement, the terms of this Note shall
govern.  This Note is pari passu as to
payment  and lien priority rights, ratably with all Other Purchasers
of 3% Convertible Senior Secured Promissory Notes, as provided in the Security
Agreement. This Note is junior
as to payment and lien priority rights with respect to up to $5.0 million in
senior funded debt, as provided in the Security Agreement.

       

      2.        
   This Note is convertible into common stock of the Company at
any time upon the election of the Holder into that number of shares of Common
Stock equal to the quotient of (a) the
outstanding principal amount and accrued interest of this Note as of date of
such election, divided
by (b) $0.50 (the “Conversion
Price”).  Such voluntary election to convert by Holder is
herein called a “Voluntary
Conversion”.   A Voluntary Conversion and a conversion
under any of the circumstances described in Sections 3 and 4  below
are all herein called “Conversion
Events” or singly a “Conversion
Event”.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      3.    
       Notwithstanding the other terms and
conditions of this Note, in the event of a “Change in Control
Transaction” (as hereinafter defined) which occurs prior to any other
Conversion Event, then, effective immediately prior to such Change in Control
Transaction, the outstanding principal balance of this Note shall automatically,
and without further action by the Holder, convert into that number of shares of
Common Stock equal to the quotient of (a) the
outstanding principal amount and interest due under this Note as of the closing
of such Change in Control Transaction, divided by (b) the
Conversion Price. As
used herein, the term “Change in Control
Transaction” means any of the following transactions which results in
aggregate transaction consideration payable to the common shareholders of the
Company of not less than $0.50 per share: (A) a share exchange, consolidation or
merger of the Company with or into any other entity or any other corporate
reorganization whether or not the Company is the surviving entity (unless the
stockholders of the Company immediately prior to such share exchange,
consolidation, merger or reorganization hold in excess of fifty percent (50%) of
the general voting power of the Company or the surviving entity, as the case may
be, immediately after the closing of such transaction); (B) a transaction or
series of related transactions in which in excess of fifty percent (50%) of the
Company’s general voting power is transferred to a third party (or group of
affiliated third parties) that were not previously stockholders of the Company
(other than in connection with an original issuance of shares of capital stock
by the Company); or (C) a sale of all or substantially all of the assets of the
Company (unless the stockholders of the Company immediately prior to such sale
hold in excess of fifty percent (50%) of the general voting power of the
purchasing party or parties).  The determination of “general voting
power” shall be based on the aggregate number of votes that are
attributable to outstanding securities entitled to vote in the election of
directors, general partners, managers or persons performing analogous functions
to directors of the entity in question, without regard to contractual
arrangements that establish a management structure or that vest the right to
designate directors in certain parties.  In the event of a conversion
upon a Change in Control Transaction, the Holder shall be entitled to
participate in such Change in Control Transaction to the same extent as the
other holders of Common Stock.  In addition, in the event of a
conversion upon a Change in Control Transaction, the Holder (w) shall be
required to participate in such Change in Control Transaction to the extent such
participation is necessary to consummate the Change in Control Transaction or is
otherwise necessary or appropriate in connection therewith (as determined by the
Company in its sole discretion), (x) shall give its consent and approval to such
Change in Control Transaction, (y) shall, at the request of the Company, execute
any documents, instruments or certificates and take any actions determined by
the Company, in its sole discretion, to be necessary or appropriate in
connection with such Change in Control Transaction, and (z) hereby waives any
rights of dissent or appraisal in connection with such Change in Control
Transaction.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      4.       
    Notwithstanding the other terms and conditions of this
Note, in the event that, prior to the occurrence of another Conversion Event,
the trading price of the Common Stock closes at not less than $1.50 per share
for not less than twenty  (20) consecutive trading days prior to the
Maturity Date, then, effective immediately upon the close of trading on such
twentieth (20th)
consecutive trading day, the outstanding principal balance of this Note shall,
at the election of the Company, and without further action by the Holder,
convert into the number of shares of Common Stock equal to the quotient of (a) the
outstanding principal amount and interest due under this Note on such twentieth
(20th) day,
divided by (b)
the Conversion Price.

       

      5.      
     Upon the occurrence of a Conversion Event, the
applicable amount of outstanding principal and accrued interest under this Note
shall be converted into Common Stock of the Company at the Conversion Price,
without any further action by the Holder and whether or not the Note is
surrendered to the Company or its transfer agent.  The Company shall
not be obligated to issue certificates evidencing the shares of the Common Stock
issuable upon such conversion unless and until such Note is either delivered to
the Company or its transfer agent, or Holder notifies the Company or its
transfer agent that such Note has been lost, stolen or destroyed and executes an
agreement satisfactory to the Company to indemnify the Company from any loss
incurred by it in connection with such Note.  The Company shall, as
soon as practicable after such delivery, or such agreement and indemnification,
issue and deliver at such office to the Holder, a certificate or certificates
for the securities to which Holder shall be entitled and a check payable to the
holder in the amount of any cash amounts payable as the result of a conversion
into fractional shares, as determined by the board of directors of the
Company.  Such conversion shall be deemed to have been made
concurrently with the close of the Conversion Event.  The person or
persons entitled to receive securities issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such securities on
such date.

       

      6.     
      In the event of any default hereunder,
Company shall pay all reasonable attorneys’ fees and court costs actually
incurred by Holder in enforcing and collecting this Note.

       

      7.      
     Company may NOT prepay the principal amount of
this Note and accrued interest hereunder, in whole or part, at any time prior to
the Maturity Date.

       

      8.       
    If there shall be any Event of Default (as defined
below) hereunder, at the option and upon the declaration of the Majority in
Interest (defined as the holders of a majority of the dollar value of the Notes
issued pursuant to the Holder and the Other Purchasers under the Note
Subscription  Agreement) and upon written notice to the Company (which
election and notice shall not be required in the case of an Event of Default
under Sections 8(b) or 8(c)), this Note shall accelerate and all principal and
unpaid accrued interest shall become immediately due and payable. Additionally,
upon the occurrence of an Event of Default, the Holder, at the option and upon
the decision of a Majority in Interest, may exercise its rights as a secured
party, or take or decline to take, any other action, with respect to the
Collateral. The occurrence of any one or more of the following shall constitute
an “Event
of Default”:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (a)           Company
fails to pay timely any  principal and accrued interest or other
amounts due under this Note on the date the same becomes due and payable, and
such amount remains unpaid for a period of ten (10) business days after written
notice thereof from Holder;

       

      (b)           Company
files any petition or action for relief under any bankruptcy, reorganization,
insolvency or moratorium law or any other law for the relief of, or relating to,
debtors, now or hereafter in effect, or makes any assignment for the benefit of
creditors or takes any corporate action in furtherance of any of the
foregoing;

       

      (c)           An
involuntary petition is filed against Company (unless such petition is dismissed
or discharged within sixty (60) days under any bankruptcy statute now or
hereafter in effect), or a custodian, receiver, trustee, assignee for the
benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of Company; or

       

      (d)           The
senior lender has declared a default under any Permitted Senior Indebtedness (as
defined in the Security Agreement).

       

      9.          
 This Note shall be governed by construed and under the laws of the State
of Florida, without giving effect to conflicts of laws principles.

       

      10.           Any
term of this Note may be amended or waived with the written consent of Company
and the holders of a Majority in Interest, provided that this Note may not be
amended if it disproportionately affects the Holder hereof, without the consent
of Holder of this Note.  Upon the effectuation of such waiver or
amendment in conformance with this Section 10, the Company shall promptly give
written notice thereof to the record Holders of the Notes who have not
previously consented thereto in writing.

       

      11.           Nothing
contained in this Note shall be construed as conferring upon the Holder or any
other person the right to vote or to consent or to receive notice as a
stockholder of the Company.

       

      12.           This
Note may be transferred only upon (a) its surrender by Holder to the Company for
registration of transfer, duly endorsed, or accompanied by a duly executed
written instrument of transfer in form satisfactory to the Company and (b)
compliance with applicable provisions of the Note Subscription Agreement,
including (without limitation) the Company’s receipt, if it so requests, of an
opinion of counsel as set forth in the Note Subscription
Agreement.  Thereupon, this Note shall be reissued to, and registered
in the name of, the transferee, or a new Note for like principal amount and
interest shall be issued to, and registered in the name of, the
transferee.  Interest and principal shall be paid solely to the
registered holder of this Note.  Such payment shall constitute full
discharge of the Company’s obligation to pay such interest and
principal.

       

      

       

      COUNTERPART
SIGNATURE PAGE FOLLOWS

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      3%
CONVERTIBLE SENIOR SECURED PROMISSORY NOTE

      COUNTERPART
SIGNATURE PAGE

       

      

       

      This Note
is hereby issued to Holder as of the date first above written.

       

      

      
        
          
            
              
                
                  	 
      	
                          MiMedX  Group,
      Inc.

                        
	 
      	
                           
      

                        	 
      
	 
      	
                           
      

                        	 
      
	 
      	
                          By:

                        	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

      

      

      

      

      Acknowledged
and Agreed to by Holder:

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Signature
      for Corporate, Partnership, or other Entity Holder:

                                                	
                                                  Signature
      for Individual Holder:

                                                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                  (Print
      Name of Entity)

                                                	 
      	
                                                  (Signature)

                                                	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                  By:

                                                	 
      	 
      	
                                                  Print
      Name:

                                                	 
      
	
                                                  Print
      Name:

                                                	 
      	 
      	 
      	 
      
	
                                                  Print
      Title:ex10_3.htm

    
      

    

    Exhibit
10.3

     

    
      SECURITY AND INTERCREDITOR
AGREEMENT

      

      

      THIS
SECURITY AND INTERCREDITOR AGREEMENT (this “Security Agreement”), dated April
___, 2009, by and among MIMEDX, INC., a corporation under the laws of the state
of Florida (“Grantor”), in favor of each
holder of the 3% Convertible Secured Promissory Notes issued by MiMedx Group,
Inc. (individually a “Holder” and collectively the “Holders”).

      

      R E C I T A L
S

      

      WHEREAS,
in connection with certain 3% Convertible Secured Promissory Notes, issued
pursuant to the Subscription Agreements (defined below), executed and delivered
by MiMedx Group, Inc., a corporation under the laws of the State of Florida, the
“Borrower”), payable to the order of each of the Holders, Borrower is required
to have executed and delivered this Security Agreement encumbering all of the
tangible and intangible assets of Grantor with the exception of
the membership interests held by Grantor in SpineMedica, LLC, a wholly-owned
subsidiary of Grantor, in favor of the Holders; and

      

      WHEREAS,
Grantor has determined that the Notes shall inure to the benefit of Grantor and
that it is in its best interest to execute this Security Agreement;

      

      NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt of which are hereby acknowledged, the parties hereto
agree as follows:

      

      1.         
   Defined
Terms.  The following terms shall have the following meanings
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):

      

      “Borrower”
shall have the meaning set forth in the Recitals above.

      

      “Collateral"
shall have the meaning set forth in Section 2 hereof.

      

      “Collateral
Agent" shall have the meaning set forth in Section 5(h) hereof.

      

      “Event of
Default" shall have the meaning given to it in the Notes.

      

      “Holder”
or “Holders” shall have the meaning set forth in the heading to this Security
Agreement.

      

      “Majority
In Interest” means, at any time, Holders holding more than fifty percent (50%)
of the outstanding principal amount of the Notes at such time.

      

      “Notes”
means those certain 3% Convertible Secured Promissory Notes, issued pursuant to
the Subscription Agreements, executed and delivered by MiMedx Group, Inc.,
payable to the order of each of the Holders.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      "Permitted
Dispositions” means (i) transfers in the ordinary course of
business,  including, without limitation, sales of inventory and
products made for sale, fixtures, furniture, and  transfers of worn
out, obsolete or surplus equipment; and (ii) any and all licenses of
intellectual property from the Grantor to third parties.

      

      "Permitted
Liens" means:

      

      (a)  Liens
consisting of any license or sublicense of intellectual property and any
interest of a licensor under any such license or sublicense;

      

      (b)  Liens
arising solely by virtue of any statutory or common law provision relating to
banker's liens, rights of setoff or similar rights and remedies as to deposit
accounts or other funds maintained with a Holder depository institution;
and

      

      (c)  Liens
arising from any Permitted Senior Indebtedness.

      

      “Permitted
Senior Indebtedness” means any bank debt not to exceed $5,000,000, hereafter
incurred by the Grantor or its affiliates.

      

      “Pro Rata
Share” shall have the meaning set forth in Section 5 (e) hereof.

      

      "Secured
Obligations" means all indebtedness, liabilities and obligations of Grantor to
Holders, whether now existing or hereafter incurred, pursuant to the
Notes.

      

      “Subscription
Agreements” means the Subscription Agreements for 3% Convertible Senior Secured
Promissory Notes between each Holder and the Borrower, pursuant to which the
Notes were issued.

      

      "UCC"
means the Uniform Commercial Code as the same may, from time to time, be in
effect in the State of Florida; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Holder’s security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
Florida, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection of priority and for purposes of definitions related to
such provisions.

      

      2.        
    Grant of Security
Interest.  As collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Secured Obligations and in order to induce the Borrower
and Holders to cause the Notes to be issued, Grantor hereby grants to Holders, a
security interest, subject to the subordination provisions set forth in Section
5 herein, in all tangible and intangible assets of Grantor, now or hereafter
owned or acquired by Grantor or in which Grantor now has or hereafter has or
acquires any rights, and wherever located, with the exception of
the  membership interest held by Grantor in SpineMedica, LLC, its
wholly-owned subsidiary (the “Collateral”).  The Collateral shall
include, but not be limited to, Grantor’s accounts, inventory, chattel paper,
contract rights; documents; equipment; fixtures; instruments; supporting
obligations and letter-of-credit rights; general intangibles; intellectual
property; investment property; goods; commercial tort claims; all money, cash,
cash equivalents and securities of any kind of Grantor; all of the Grantor’s
deposit accounts and payment accounts; and shall also include:

      
        
           

        

        
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      (i)        
    all
books, records and other property related to or referring to any of the
foregoing, including books, records, account ledgers, data processing records,
computer software and other property and general intangibles at any time
evidencing or relating to any of the foregoing; and

      

      (ii)       
    all
accessions to, substitutions for and replacements, products and proceeds of any
of the foregoing, including, but not limited to, proceeds of any insurance
policies, claims against third parties, and condemnation or requisition payments
with respect to all or any of the foregoing.

      

      (iii)           to
the extent not otherwise included, all proceeds of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of the Collateral.

      

      Notwithstanding
the foregoing, "Collateral" shall not include any contract which prohibits the
granting of a security interest in such contract or any asset leased by
Grantor.

      

      3.       
      Perfection and Protection of
Security Interest.

      

      (a)       
    Perfection of Security
Interest.  Grantor shall, at its expense, perform all steps
requested by the  Collateral Agent at any time to perfect, maintain,
protect, and enforce the Holders’ Liens, including:  (i) executing,
delivering and/or filing of financing or continuation statements, and amendments
thereof, in form and substance reasonably satisfactory to the Holders; (ii) when
an Event of Default has occurred and is continuing, if requested by the
Collateral Agent, transferring the Collateral to warehouses or other locations
designated by the Collateral Agent; (iii) placing notations on Grantor’s books
of account to disclose the Holders’ security interest; and (iv) taking such
other steps as are deemed necessary or desirable by the Collateral Agent to
maintain and protect the Holders’ Liens.

      

      (b)        
   Financing
Statements.  Grantor hereby irrevocably authorizes the
Collateral Agent at any time and from time to time to file in any filing office
in any Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all of the assets of
Grantor or words of similar effect (excepting only the membership interests of
SpineMedica held by Grantor), regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the UCC or
the Uniform Commercial Code of such jurisdiction, or (ii) as being of an equal
or lesser scope or with greater detail, and (b) contain any other information
required by part 5 of Article 9 of the UCC of the State of Florida for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether the Grantor is an organization, the type of organization
and any organization identification number issued to the Grantor, and (ii) in
the case of a financing statement filed as a fixture filing, a sufficient
description of real property to which the Collateral relates.  Any
such filing, and any amendment, continuation or termination with respect
thereto, shall be made only with the approval of the Majority In Interest for
and on behalf of all of the Holders. Grantor agrees to furnish any such
information to the Holders promptly upon request.  Grantor agree that
a carbon, photographic, photostatic, or other reproduction of this Security
Agreement or of a financing statement is sufficient as a financing
statement.

      
        
           

        

        
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      (c)       
    Confirmation.  From
time to time, Grantor shall, upon the Collateral Agent’s request, execute and
deliver confirmatory written instruments pledging to the Holders the Collateral,
but Grantor’s failure to do so shall not affect or limit any security interest
or any other rights of the Holders in and to the Collateral with respect to
Grantor.  Until all Secured Obligations have been fully satisfied, the
Holders’ Liens shall continue in full force and effect in all
Collateral.

      

      4.           
  Power of
Attorney.  Subject to compliance with Section 5(b) hereof,
Grantor hereby appoints the Collateral Agent and any other designees appointed
by the Collateral Agent from time to time, as the Grantor’s attorney-in-fact,
with power:  (a) to endorse the Grantor’s name on any checks, notes,
acceptances, money orders, or other forms of payment or security that come into
the Holders’ possession; (b) to sign the Grantor’s name on any invoice, bill of
lading, warehouse receipt or other negotiable or non-negotiable document
constituting Collateral, on drafts against customers, on assignments of
accounts, on notices of assignment, financing statements and other public
records and to file any such financing statements by electronic means with or
without a signature as authorized or required by applicable law or filing
procedure; (c) to notify the post office authorities to change the address for
delivery of the Grantor’s mail to an address designated by the Collateral Agent
and to receive, open and dispose of all mail addressed to the Grantor; (d) to
send requests for verification of accounts to customers or account debtors; (e)
to complete in the Grantor’s name or the Holders’ name, any order, sale or
transaction, obtain the necessary documents in connection therewith, and collect
the proceeds thereof; (f) to file such financing statements with respect to this
Security Agreement, with or without the Grantor's signature, or to file a
photocopy of this Security Agreement in substitution for a financing statement,
as the Collateral Agent may deem appropriate, and to execute in the Grantor's
name such financing statements and amendments thereto and continuation
statements which may require the Grantor's signature; and (g) to do all things
necessary to carry out the fulfillment of the obligations of the Grantor under
the Notes and this Security Agreement.  Grantor hereby ratifies and
approves all acts of such attorney-in-fact.  Neither the Majority In
Interest nor the Collateral Agent or other designees or attorneys will be liable
for any acts or omissions or for any error of judgment or mistake of fact or law
except for their willful misconduct.  This power, being coupled with
an interest, is irrevocable until the Secured Obligations have been fully
satisfied.

      

      5.        
     Subordination and
Intercreditor Provisions.

      

      (a)      
     Subordination to Permitted
Senior Indebtedness.  Enforcement of Holder’s security interest
in the Collateral, and payment of principal and interest on the Notes, is
expressly subordinate and junior in right of payment and lien priority to all
principal, interest, charges, expenses and security interests arising out of or
relating to all Permitted Senior Indebtedness, pursuant to the following terms
and conditions.  The Collateral Agent is expressly authorized to
execute on behalf of the Holders a subordination agreement in favor of a bank
which issues Permitted Senior Indebtedness that is consistent with the terms
hereof.

      
        
           

        

        
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      (b)       
    Standstill.  Holders
shall not accelerate payment of the Notes, or commence any action, suit or
proceeding against Grantor with respect to the Notes, or otherwise pursue any
remedy to enforce Holders’ rights to payment of the Notes, or to enforce the
rights of Holders as secured creditors with respect to the Collateral, while any
Permitted Senior Indebtedness is outstanding, until after ninety (90) days
notice to Grantor of the occurrence of an Event of Default. After the 90 day
period, and if the Event of Default has not been cured within such time period,
the Holders may, with the approval of a Majority In Interest, acting
through the Collateral Agent,   pursue any and
all  remedies under the Notes and this Security
Agreement.

      

      (c)       
    Rights With Respect to
Notes.   Upon an Event of Default, the Majority In
Interest, acting through the Collateral Agent and subject to Section 5(b), shall
have the right to accelerate the maturity of the Notes.

      

      (d)       
    Waivers.  Waivers
granted pursuant to this Security Agreement shall be effective as against all
Holders if in writing executed by the Collateral Agent.

      

      (e)       
    Sharing of Payments and
Proceeds.  The Holders shall share pari passu on a ratable
basis equal to its Pro Rata Share (defined below) in all payments from any
source made on any of the Notes, and in the Collateral and any proceeds
therefrom.   "Pro Rata Share" shall mean an amount equal to the
amount which results when the total amount of principal that is owing to that
Holder is divided by the aggregate principal owing to all Holders (expressed as
a percentage).

      

      (g)       
    Amendment.  No
amendment of any provision of this Security Agreement shall in any event be
effective unless the same shall be in writing and signed by the Majority In
Interest.

      

      (h)       
    Collateral
Agent.  Each Holder hereby appoints Gilford Securities
Incorporated as its collateral agent hereunder (in such capacity, the "Collateral
Agent"),  who shall act as a representative of the Holders to
carry out instructions and directives of the Majority In Interest for purposes
of this Security Agreement and to have the other responsibility and authority
set forth in this Security Agreement.  The Holders’ approval of this
Security Agreement shall include confirmation of the authority of the Collateral
Agent.  Grantor may rely upon the acts of the Collateral Agent for all
purposes permitted hereunder.

      

      The
Collateral Agent shall have full power of attorney to act in the name, place,
and stead of the Holders in all matters in connection with this Security
Agreement, upon the approval of the Majority In Interest or as may be
specifically provided herein.  The Collateral Agent’s authority to act
on behalf of the Holders includes the power to execute all such documents,
waivers, amendments, and instruments as are approved by the Majority In Interest
or by this Security Agreement.

      

      The
Collateral Agent shall have no duties or obligations except as specifically set
forth in this Security Agreement.  In acting on behalf of the Majority
In Interest, the Collateral Agent may rely upon, and shall be protected in
acting or refraining from acting upon, an opinion or advice of counsel,
certificate of auditors or other certificate, statement, instrument, opinion,
report, notice, request, consent, order, arbitrator’s award, appraisal, bonds,
or other paper or document reasonably believed by them to be genuine and to have
been executed or presented by the proper party or parties.  The
Collateral Agent shall not be personally liable to the Majority In Interest for
any action taken, suffered, or omitted by him, except for willful misconduct or
gross neglect.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      The
Collateral Agent and each Holder hereby agree that the Majority In Interest
shall have the full and complete right and authority to give instructions to,
and otherwise direct, the Collateral Agent in respect of the Collateral or any
action with respect to any Collateral.  The Collateral Agent shall not
have by reason of this Security Agreement or any other document a fiduciary
relationship in respect of any Holder.

      

      6.          
   Representations and
Warranties.  Grantor hereby represents and warrants to the
Holders that except for the security interest granted under this Security
Agreement and Permitted Liens, Grantor is the sole legal and equitable owner of
each item of Collateral in which it purports to grant a security interest
hereunder, having good, marketable title thereto and that the Holders shall have
a valid, binding and enforceable lien and/or security interest in and to the
Collateral.

      

      7.         
    Covenants.  Grantor
covenants and agrees with the Holders that from and after the date of this
Security Agreement and until the Secured Obligations have been performed and
paid in full:

      

      7.1       
    Further
Assurances.  At any time and from time to time, upon the
written request of the Collateral Agent, and at the sole expense of Grantor,
Grantor shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as the Holders may
reasonably deem desirable to obtain the full benefit of this Security
Agreement.

      

      7.2        
   Maintenance of
Records.  Grantor shall keep and maintain at its own cost and
expense satisfactory and complete records of the Collateral. Grantor shall allow
reasonable access to such records upon reasonable notice from
Holders.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      7.3      
     Collateral.  The
Grantor agrees that it will not, without the prior written consent of the
Collateral Agent, consent to, permit or suffer to occur any sale,
transfer,  hypothecation, lien, or use of any of the Collateral
adversely affecting the interest of the Holders therein, other
than  pursuant to Permitted Senior Indebtedness, Permitted
Liens, and Permitted Dispositions.

      

      8.          
   Rights and Remedies Upon
Default.

      

      (a)  
 Upon the occurrence and during the continuation of an Event of Default
(subject to the provisions of Section 5(b)), the Holders, acting through the
Collateral Agent, shall have the right to take title to, seize, assign, sell,
and otherwise dispose of the Collateral, or any part thereof, either at public
or private sale, in lots or in bulk, for cash, credit or otherwise, with or
without representations or warranties, and upon such terms as shall be
reasonable, and any Holder may bid or become the purchaser at any such
sale.  If notification to Grantor of any intended disposition by the
Holders of any of the Collateral is required by applicable law, such
notification will be deemed to have been reasonable and proper if given at least
20 days prior to such disposition.

      

      (b)  
 If any Event of Default shall occur and be continuing, the Holders, acting
through the Collateral Agent,  may exercise in addition to all other
rights and remedies granted to it under this Security Agreement, all rights and
remedies of a secured party under the UCC.

      

      (c)  
 Except as specifically provided for herein, Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Security Agreement or any
Collateral.

      

      (d)   
The proceeds of any sale, disposition or other realization upon all or any part
of the Collateral shall be distributed in the following order of priorities
(subject to payment in full of any Permitted Senior Indebtedness):

      

      First, to
the Collateral Agent in an amount sufficient to pay in full the reasonable costs
of the Collateral Agent in connection with such sale, disposition or other
realization, including all fees, costs, expenses, liabilities and advances
incurred or made by the Collateral Agent in connection therewith, including,
without limitation, reasonable attorneys' fees;

      

      Second,
to the Holders in the amount of the Pro Rata Share owing to each Holder;
and

      

      Finally,
upon payment in full of the Secured Obligations, to Grantor or its
representatives or as a court of competent jurisdiction may direct.

      

      9.            
 Reinstatement.  This
Security Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an assignment for the
benefit of Holders or should a receiver or trustee be appointed for all or any
significant part of Grantor's property and assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made.  In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      10.        
   Miscellaneous.

      

      10.1          No Waiver; Cumulative
Remedies.

      

      (a)    Holders
shall not by any act, delay, omission or otherwise be deemed to have waived any
of their respective rights or remedies hereunder, nor shall any single or
partial exercise of any right or remedy hereunder on any one occasion preclude
the further exercise thereof or the exercise of any other right or
remedy.

      

      (b)   
The rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law.

      

      (c)  
 None of the terms or provisions of this Security Agreement may be waived,
altered, modified or amended except as provided herein.

      

      10.2  Termination of this Security
Agreement. This Security Agreement shall terminate upon the payment and
performance in full of the Secured Obligations.

      

      10.3  Successor and
Assigns. This Security Agreement shall be binding upon the successors of
Grantor and Holders and may not be assigned by any party.

      

      10.4  Governing Law. In all
respects, including all matters of construction, validity and performance, this
Security Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Florida applicable to contracts made
and performed in such state, without regard to the principles thereof regarding
conflict of laws.

      

      10.5  Counterparts. This
Security Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

      

      10.6  Titles and Subtitles.
The titles of the sections and subsections of this Security Agreement are not to
be considered in construing this Security Agreement.

      

      10.7  Severability. In case
any provision of this Security Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

      

      10.8  Agreement is Entire
Contract. This Security Agreement, together with the Notes and the
Subscription Agreements, constitutes the final, complete and exclusive contract
between the parties hereto with respect to the subject matter hereof and no
party shall be liable or bound to the other in any manner by any warranties,
representations, guarantees or covenants except as specifically set forth herein
and in such other documents referred to above. Nothing in this Security
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto, and their respective successors and assigns, any right,
remedies, obligations or liabilities under or by reason of this Security
Agreement, except as expressly provided herein.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      In
Witness Whereof, the undersigned have caused this Security Agreement to be
executed and delivered by its duly authorized officer on the date first set
forth above.

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  GRANTOR:

                                
	 
      	 
      	 
      
	
                                  MiMedx,
      Inc.

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:  
      

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  COLLATERAL
      AGENT:

                                
	
                                  Gilford
      Securities Incorporated

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  By:

                                	 
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

      

      

      

      

      HOLDERS’
COUNTERPART SIGNATURE PAGE TO SECURITY AND INTERCREDITOR AGREEMENT
FOLLOWS

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      HOLDERS’
COUNTERPART SIGNATURE PAGE TO

      SECURITY
AND INTERCREDITOR AGREEMENT

      

      

      

      HOLDERS:

      

      
        
          
            
              
                
                  
                    
                      
                        	
                                Signature
      for Corporate, Partnership, or other Entity Holder:

                              	
                                Signature
      for Individual Holder:

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                (Print
      Name of Entity)

                              	 
      	
                                (Signature)

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                By:

                              	 
      	 
      	
                                Print
      Name:

                              	 
      
	
                                Print
      Name:

                              	 
      	 
      	 
      	 
      
	
                                Print
      Title:

                              	 
      	 
      	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

       

       

      10

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