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 resold without
registration
