AMENDMENT AND SETTLEMENT
AGREEMENT
This Amendment and Settlement Agreement
(“Settlement Agreement”), is made this 19
th day of August, 2009, by, between and among
MIMEDX GROUP, INC ., a Florida corporation (herein sometimes
individually called “MDXG”, and its wholly owned
subsidiary MIMEDX, INC. , a Florida corporation herein
sometimes individually called “MiMedx” ( both MDXG and
MiMedx having their principal offices located at 3802 Spectrum
Blvd, Ste 300, Tampa, FL 33612-9210, (each of MDXG and MiMedx being
herein jointly and severally referred to as the “MiMedx
Parties”), AND THOMAS J. GRAHAM, M.D . (sometimes
herein sometimes individually called “Dr. Graham”)
an individual resident of the State of Maryland and PHANTOM HAND
PROJECT, LLC (sometimes herein individually called
“Phantom”) , a limited liability company under the law
of Maryland (each of Dr. Graham and Phantom having its
principal office located at Paradise Farm, 2415 Old Bosley Road,
Timonium, MD 21093, and being herein jointly and severally called
the “Graham Parties’). The MiMedx Parties and the
Graham Parties are herein sometimes referred to individually as a
“Party” or “party” and jointly as the
“Parties” or “parties”.
WHEREAS, on September 21, 2007, MiMedx and
Dr. Graham entered into a Consulting Agreement (the
“Consulting Agreement”); and
WHEREAS, on May 17, 2008, MiMedx and
Dr. Graham entered into a “Cost Recovery and Revenue
Sharing Agreement” (the “Cost Recovery
Agreement”); and
WHEREAS, on May 17, 2008, MiMedx and
Dr. Graham entered into a “Finders Fee Agreement”
(the “Finders Fee Agreement”); and
WHEREAS, the Parties desire to terminate the
Cost Recovery Agreement and the Finder’s Fee Agreement, to
amend the Consulting Agreement and to enter into certain other
agreements all as set forth herein.
Settlement
Agreement-Execution Copy
NOW, THEREFORE, intending to be legally bound,
in consideration of the mutual promises and agreements herein
contained, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound hereby, and to settle fully
and completely all disputes, whether actual or potential, between
and among them, agree as follows.
1. Transfer of Patent Applications to
Dr. Graham .
MiMedx does hereby transfer to Dr. Graham
the following patent applications including the sole right to claim
priority in the United States, abroad or under treaty: United
States Patent Application No. US 61/098,478 and United
States Patent Application No. US 61/101,890 (the
“Patent Applications”). Immediately upon execution of
this Settlement Agreement, MiMedx will execute such documents and
agreements as may be reasonably requested by Dr. Graham to perfect
the transfer of ownership of the Patent Applications on the records
of the United States Patent and Trademark Office. For certainty,
MiMedx agrees that this Settlement Agreement allows Dr. Graham
to exploit the inventions in the Patent Applications and any
subsequent applications that claim priority to the Patent
Applications (and any corresponding PCT applications or patents
issuing therefrom) immediately upon execution of this Settlement
Agreement, provided that the Graham Parties shall have no rights,
other than the right to receive payment under the Consulting
Agreement, as amended below, to (a) the inventions associated
with the products and applications included in the Level Assets
listed in Exhibit A or subsequent applications claiming
priority thereto (nor to any corresponding PCT applications or
patents issuing therefrom), (b) any other Contributed IP (as
defined in the Consulting Agreement as amended below), or
(c) any other MiMedx intellectual property not related to the
Patent Applications. Without limiting the generality of the
foregoing, the Graham Parties shall have no rights to claim
priority with respect to the items delineated in (a), (b), and
(c) of the immediately preceding sentence.”
2.
Accelerated Vesting of Options; Extension of Exercise Period
.
Pursuant to Option Agreement dated June 15,
2007, MiMedx granted Dr. Graham an option to purchase 50,000
shares of MiMedx common stock at an exercise price of $1.00 per
share (the “June 15 Grant”). Pursuant to Option
Agreement dated September 25, 2007, MiMedx granted
Dr. Graham an option to purchase 200,000 shares of MiMedx
common stock at an exercise price of $2.40 per share (the
“September 25 Grant”). These options have been
converted into the option to purchase MDXG common stock at the
aforesaid exercise prices. The June 15 Grant and the
September 25 Grant are hereby deemed to be fully vested and
exercisable at any time through and including June 14, 2012,
for the June 15 Grant, and September 24, 2012, for the
September 15 Grant. Each of the option agreements is hereby
deemed to be amended in accordance with the preceding sentence.
Each of the Graham Parties acknowledges and agrees that it neither
holds nor is entitled to any other options to purchase shares in
any of the MiMedx Parties other than the June 15 Grant and the
September 25 Grant.
3.
Termination of Certain Agreements .
The Finders Fee Agreement and the Cost Recovery
Agreement are hereby terminated and declared by the parties to be
of no further force and effect. Neither party to either the Finders
Fee Agreement or the Cost Recovery Agreement shall hereafter have
any liability or responsibility to the other party under either
such agreement.
Settlement
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4.
Allocation of Sale Proceeds from Sale of “Level
Assets” .
MiMedx is exploring the disposition of the
assets described on Exhibit A, attached hereto and made a part
hereof. (the “Level Assets”). For the avoidance of
doubt, the Level Assets do not include any assets of the MiMedx
Parties other than as described on Exhibit A. Without limiting
the generality of the foregoing sentence, it is expressly
understood that the Level Assets exclude (i) the BioStaple
Device, the Collarod Device, the CMC Device and the Tenor
Instrument Device, all of which are and will remain assets of the
Mimedx Parties, and (ii) the Patent Applications.
Dr. Graham shall make commercially reasonable efforts to
identify and introduce prospective acquirers of the Level Assets to
MiMedx. The terms of any disposition shall be as determined in the
sole discretion of MiMedx. In the event that the disposition of all
or part of the Level Assets is consummated, in one or more
transactions, on or prior to September 20, 2010, then the
aggregate proceeds from such disposition(s) shall be allocated as
follows: (i) First, to pay the costs of the sale or other
disposition transaction; (ii) Second, to pay MiMedx the amount
of $1,150,000, and (iii) thereafter, all proceeds in excess of
(i) and (ii) shall be allocated seventeen and
1 / 2
percent (17.5%) to the Graham
Parties and eighty-two and 1 / 2
percent (82.5%) to MiMedx. If the
proceeds from such disposition(s) are less than $1,150,000, the
Graham Parties shall not be liable to the MiMedx Parties or
otherwise for any shortfall.
5.
Amendments to Consulting Agreement .
The Consulting
Agreement is hereby amended as follows:
(a) Section 4 of the
Consulting Agreement is hereby amended by deleting the word
“three year” from the fifth sentence of said
Section 4) and adding the following to the end of said
Section 4, “Notwithstanding the foregoing, if,
(i) on or prior to September 20, 2010, MiMedx enters into
and closes a transaction to dispose of all or part of the Level
Assets, and (ii) the other party to any such transaction
agrees to assume this Consulting Agreement and, from and after the
date of such assumption, to make the consulting payments required
by Section 2(a) hereof without regard to the proviso at the end of
the first sentence of said Section 2(a), at the election of
the assuming party, upon notice to Dr. Graham, the end of the
initial term of the Consulting Agreement will be extended for up to
three (3) years after the date of such assumption. If the
conditions in the preceding sentence are not met, then this
Consulting Agreement shall expire on September 21, 2010, and
all obligations hereunder will cease unless expressly agreed herein
to continue past the expiration or termination hereof. If, after
September 20, 2010, without the consent of the Company, you
provide consulting services to any other party, firm or company in
the Field or whose business in the Field would be directly or
indirectly competitive with the business of the Company, then the
Company may terminate this Consulting Agreement upon written notice
to you.”
(b) Section 2 (a) of the
Consulting Agreement is hereby amended by adding the following to
the end of the first sentence of said Section 2(a),
“provided however, that Dr. Graham agrees to forego and
forgive one-half of all consulting payments commencing with the
quarterly installment otherwise payable for the third calendar
quarter of 2009,and thereafter, until and unless an acquirer of all
or part of the Level Assets assumes this Consulting Agreement and
agrees to make the consulting payments required by this Section
2(a) from and after the date of such assumption without regard to
this proviso, in which case Dr. Graham shall look solely to
the acquirer with respect to any remaining consulting
payments.”
Settlement
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(c) Section 2 (c) of the
Consulting Agreement is hereby amended by deleting Section 2
(c) (i) — (v) and inserting in lieu thereof the
following:
“(c) (i)
Royalties . The Company shall pay you continuing royalty
fees in the aggregate as follows (the
“Royalties”):
(i) Three
percent (3%) of the Company’s Net Revenues derived from the
sale of Products embodying a Valid Claim under a Company Patent in
the country from which the Net Revenues originated. For the
avoidance of doubt, if any claim of a patent application is no
longer a Valid Claim, no Royalty shall thereafter be payable with
respect to a Product embodying such claim, unless such Product
embodies another Valid Claim. No royalty shall be payable with
respect to any Product that does not embody a Valid
Claim.”
(d) Sections 2 (c) (ii) —
(v) are intentionally left blank.
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