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Exhibit
10.1
NOTE AND
WARRANT PURCHASE AGREEMENT
This
NOTE AND WARRANT PURCHASE AGREEMENT (this “
Agreement ”) is made as of April 15, 2005 by
and among Large Scale Biology Corporation, a Delaware corporation
(the “ Company ”), Predictive
Diagnostics, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company (“ PDI ”), and
Kevin J. Ryan (“ Investor ”).
RECITALS
A. The
Company is currently in need of funds to help finance its
operations until the closing of its next round of equity
financing.
B. The
Company has developed certain intellectual property related to its
proprietary approach to early diagnosis of life-threatening
diseases (“ Intellectual Property ”), and
has formed a wholly-owned subsidiary, PDI, to commercialize such
developments.
C. The
Investor is willing to advance funds to the Company, some of which
will fund PDI’s operations, in exchange for the issuance to
him of (i) a Secured Promissory Note evidencing the
Company’s obligation to repay the Investor’s loan of
the advanced funds secured by a first priority security interest in
the Intellectual Property; and (ii) a Warrant to purchase
certain shares of capital stock of the Company or PDI, all as
provided in this Agreement.
NOW
THEREFORE, the parties hereby agree as follows:
1. PURCHASE
AND SALE OF NOTE AND WARRANT.
1.1
Note Purchase . Subject to the terms and
conditions of this Agreement, the Company agrees to sell to
Investor, and Investor agrees to purchase from the Company, a
Secured Promissory Note in the form attached to this Agreement as
Exhibit A (the “ Note ”) in
the principal amount of $3,000,000.00. The performance of the
Company of its obligations under the Note is secured by a Security
Agreement in the form attached hereto as Exhibit B (the
“ Security Agreement ”) and a Patent
Security Agreement in the form attached hereto as Exhibit C
(the “ Patent Security Agreement ” and
together with the Security Agreement, the “ Security
Agreements ”) each entered into by the Company and
the Investor as of even date herewith.
1.2
Warrant Issuance . Subject to the terms and
conditions of this Agreement, the Company further agrees to sell
and issue to Investor a warrant to purchase shares of the
Company’s capital stock (“ LSBC Stock
”) or shares of PDI’s capital stock (“ PDI
Stock ”, and collectively with LSBC Stock, “
Warrant Stock ”) in the form attached hereto as
Exhibit D (the “ Warrant
”).
2.
CLOSING . The purchase and sale of the Note and
the Warrant will take place at the offices of the Company, 3333
Vaca Valley Parkway, Vacaville, California, on April 15, 2005 at
11:00 a.m. Pacific time, or at such other time and place as the
Company and the Investor mutually agree upon (which time and place
are referred to as the “ Closing
”). At the Closing, Investor will deliver to the
Company payment in full for the Note and the Warrant in the amount
of $3,000,000, which Investor agrees to purchase at the Closing by
wire transfer of funds to the Company. At the Closing, the
Company will deliver to the Investor a duly executed Note and a
duly executed Warrant.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY .
The Company hereby represents and Warrant to Investor that the
statements in the following paragraphs of this Section 3 are
all true and complete as of immediately prior to the
Closing:
3.1
Organization, Good Standing and Qualification .
The Company has been duly incorporated and organized, and is
validly existing in good standing, under the laws of the State of
Delaware. The Company has the corporate power and authority
to own and operate its properties and assets and to carry on its
business as currently conducted and as presently proposed to be
conducted.
3.2
Due Authorization . All corporate action on the
part of the Company’s directors and shareholders necessary
for the authorization, execution, delivery of, and the performance
of all obligations of the Company under, this Agreement, the Note,
the Warrant and the Security Agreements has been taken or will be
taken prior to the Closing, and this Agreement constitutes, and the
Note, the Warrant and the Security Agreements, when executed and
delivered, will constitute, valid and legally binding obligations
of the Company, enforceable in accordance with their respective
terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditor’s rights
generally and (ii) the effect of rules of law governing the
availability of equitable remedies.
3.3
Corporate Power . The Company has the corporate
power and authority to execute and deliver this Agreement, the
Note, the Warrant and the Security Agreements to be purchased by
the Investor hereunder, to issue the Note and the Warrant and to
carry out and perform all its obligations under this Agreement, the
Note, the Warrant and the Security Agreements.
3.4
Valid Issuance .
(a) The Warrant and the Warrant Stock
(the “ Securities ”), when issued, sold
and delivered in accordance with the terms of this Agreement and
the Warrant for the consideration provided for herein and therein,
will be duly and validly issued, fully paid and
nonassessable.
(b) Based in part on the
representations made by the Investor in Section 4 hereof, the
offer and sale of the Securities solely to the Investor in
accordance with this Agreement are exempt from the registration and
prospectus delivery requirements of the U.S. Securities Act of
1933, as amended (the “ 1933 Act ”) and
the securities registration and qualification requirements of the
currently effective provisions of the securities laws of the state
in which the Investor is resident.
4.
REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF
INVESTOR . Investor hereby represents and warrants
to, and agrees with, the Company, that:
4.1
Authorization . This Agreement constitutes
Investor’s valid and legally binding obligation, enforceable
in accordance with its terms except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the
enforcement of creditors’ rights generally and (ii) the
effect of rules of law governing the availability of equitable
remedies. Investor represents that Investor has full power
and authority to enter into this Agreement.
4.2
Purchase for Own Account . The Securities will be
acquired for investment for Investor’s own account, not as a
nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the 1933 Act, and
Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same.
4.3
Disclosure of Information . Investor has received
or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision
with respect to the Securities. Investor further has had an
opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the
Securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information
furnished to Investor or to which Investor had access. The
foregoing, however, does not in any way limit or modify the
representations and warranties made by the Company in
Section 3.
4.4
Investment Experience . Investor understands that
the purchase of the Securities involves substantial risk.
Investor (i) has experience as an investor in securities of
companies in the development stage and acknowledges that Investor
is able to fend for himself, can bear the economic risk of
Investor’s investment in the Securities and has such
knowledge and experience in financial or business matters that
Investor is capable of evaluating the merits and risks of this
investment in the Securities and protecting his own interests in
connection with this investment and/or (ii) has a preexisting
personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and
duration that enables Investor to be aware of the character,
business acumen and financial circumstances of such
persons.
4.5
Accredited Investor Status . Investor is an
“accredited investor” within the meaning of Regulation
D promulgated under the 1933 Act.
4.6
Restricted Securities . Investor understands that
the Securities are characterized as “restricted
securities” under the 1933 Act and Rule 144 promulgated
thereunder inasmuch as they are being acquired from the Company in
a transaction not involving a public offering, and that under the
1933 Act and applicable regulations thereunder such securities may
be reso
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