Exhibit 10.10
NOTE PURCHASE
AGREEMENT
This Note Purchase Agreement, dated
as of May 4, 2006, (this “ Agreement ”) is
entered into by and among SenoRx, Inc., a Delaware corporation (the
“ Company ”), and the persons and entities
listed on the schedule of investors attached hereto as
Schedule I (each an “ Investor ”
and, collectively, the “ Investors
”).
RECITALS
A. On the terms and subject to the
conditions set forth herein, each Investor is willing to purchase
from the Company, and the Company is willing to sell to such
Investor, a convertible promissory note in the principal amount set
forth opposite such Investor’s name on Schedule I
hereto.
B. Capitalized terms not otherwise
defined herein shall have the meaning set forth in the form of Note
(as defined below) attached hereto as Exhibit A
.
AGREEMENT
NOW THEREFORE, in consideration of
the foregoing, and the representations, warranties, and conditions
set forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Notes
.
(a) Issuance of Notes . At
the Closing (as defined below), the Company agrees to issue and
sell to each of the Investors, and, subject to all of the terms and
conditions hereof, each of the Investors severally agrees to
purchase, a convertible promissory note in the form of
Exhibit A hereto (each, a “ Note ”
and, collectively, the “ Notes ”) in the
principal amount set forth opposite the respective Investor’s
name on Schedule I hereto. The obligations of the
Investors to purchase Notes are several and not joint.
(b) Delivery . The sale and
purchase of the Notes shall take place at a closing (the “
Initial Closing ”) to be held at such place and time
as the Company and the Investors may determine (the “
Initial Closing Date ”). At the Closing, the Company
will deliver to each of the Investors the respective Note to be
purchased by such Investor, against receipt by the Company of the
corresponding purchase price set forth on Schedule I hereto
(the “ Purchase Price ”). Each of the Notes will
be registered in such Investor’s name in the Company’s
records.
(c) Subsequent Closing . The
Company may issue additional Notes pursuant to this Agreement to
such investors as it shall select, provided that the aggregate
principal amount of all Notes issued pursuant to this Agreement
does not exceed $8,000,000 (each such issuance, a “
Subsequent Closing ” and together with the Initial
Closing, the “ Closing ” and the date of such
Subsequent Closing, the “ Subsequent Closing Date
” and together with the Initial Closing Date, the “
Closing Date ”). At each such Subsequent Closing, the
Company will deliver to each of the
Investors the respective Note to be
purchased by such Investor, against receipt by the Company of the
respective Purchase Price through the payment of cash as set forth
on the Schedule I. Any such Investor shall become a party to this
Agreement and shall have the rights and obligations hereunder. Any
such Investor shall deliver the payment of the Purchase Price as
set forth herein and a counterpart signature page to this Agreement
to the Company.
2. Representations and
Warranties of the Company . The Company represents and
warrants to each Investor, except, where applicable, as set forth
on the Schedule of Exceptions attached to this Agreement as
Schedule II, that:
(a) Due Incorporation,
Qualification, etc . The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of
its state of incorporation; (ii) has the power and authority
to own, lease and operate its properties and carry on its business
as now conducted; and (iii) is duly qualified, licensed to do
business and in good standing as a foreign corporation in each
jurisdiction where the failure to be so qualified or licensed could
reasonably be expected to have a Material Adverse Effect. The
Company has no subsidiaries.
(b) Authority . The
execution, delivery and performance by the Company of each
Transaction Document to be executed by the Company and the
consummation of the transactions contemplated thereby, including
without limitation the authorization, sale, issuance and delivery
of the Notes and the shares of the Company’s capital stock
issuable on conversion thereof: (i) are within the power of
the Company and (ii) have been duly authorized by all
necessary actions on the part of the Company (including without
limitation any necessary action on the part of the stockholders of
the Company).
(c) Enforceability . Each
Transaction Document executed, or to be executed, by the Company
has been, or will be, duly executed and delivered by the Company
and constitutes, or will constitute, a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally and
general principles of equity.
(d) Non-Contravention . The
execution and delivery by the Company of the Transaction Documents
executed by the Company and the performance and consummation of the
transactions contemplated thereby, including without limitation the
authorization, sale, issuance and delivery of the Notes and the
shares of the Company’s capital stock issuable on conversion
thereof do not and will not (i) violate the Company’s
Certificate of Incorporation or Bylaws (the “ Charter
Documents ”) or any material judgment, order, writ,
decree, statute, rule or regulation applicable to the Company; or
(ii) violate any provision of, or result in the breach or the
acceleration of, or entitle any other Person to accelerate (whether
after the giving of notice or lapse of time or both), any material
mortgage, indenture, agreement, instrument or contract to which the
Company is a party or by which it is bound;.
(e) Approvals . No consent,
approval, order or authorization of, or registration, declaration
or filing with, any governmental authority or other Person
(including, without limitation, the shareholders of any Person) is
required in connection with the execution and delivery of
the
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Transaction Documents executed by
the Company and the performance and consummation of the
transactions contemplated thereby, including without limitation the
authorization, sale, issuance and delivery of the Notes and the
shares of the Company’s capital stock issuable on conversion
thereof.
(f) Equity Securities . The
Company’s total authorized and issued capitalization is as
set forth in Schedule of Exceptions. The equity securities (“
Equity Securities ”) of the Company have the
respective rights, preferences and privileges set forth in the
Company’s Charter Documents in effect on the date hereof. All
of the outstanding Equity Securities of the Company have been duly
authorized and are validly issued, fully paid and nonassessable.
The Company has duly reserved a sufficient number of shares of its
Series C Preferred Stock and Common Stock for issuance upon
conversion of the Notes and has duly reserved a sufficient number
of shares of Common Stock for issuance upon conversion of the
shares of Series C Preferred Stock which may be issued upon
conversion of the Notes (collectively, the “ Conversion
Stock ”). As of the date hereof, the Company has no
obligations to issue additional equity securities or any other
securities or rights convertible into equity securities except
(i) as issuable pursuant to the Notes or (ii) as set
forth in the fully diluted capitalization table attached to the
Schedule of Exceptions. Upon issuance in accordance with the terms
of the Notes and the Company’s Certificate of Incorporation,
the Conversion Stock (i) shall be duly and validly issued,
fully paid and nonassessable, (ii) shall not be subject to any
preemptive rights or liens, claims, encumbrances or restrictions on
transfer, other than restrictions on transfer imposed pursuant
hereto or any agreement required hereunder or under applicable
federal or state securities laws, and (iii) shall be issued in
compliance with all applicable securities laws, as presently in
effect, of the United States and each of the states whose
securities laws govern the issuance of any of the Notes
hereunder.
(g) Litigation . There is no
action, suit, proceeding or investigation pending or currently
threatened against the Company which questions the validity of this
Agreement, or the Notes, or the right of the Company to enter into
each such agreement, or to consummate the transactions contemplated
hereby or thereby or that would have, either individually or in the
aggregate, a Material Adverse Effect. The foregoing includes,
without limitation, actions pending or threatened involving the
prior employment of any of the Company’s employees, the use
in connection with the Company’s business of any information
or techniques allegedly proprietary to any of the Company’s
former employers, or the Company’s obligations under any
agreements with prior employers. The Company is not a party to, nor
subject to the provisions of, any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality.
There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to
initiate.
(h) Intellectual Property .
The Company has sufficient title and ownership of patents,
trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted without
any known conflict with or infringement of the rights of others.
There are no outstanding options, licenses, or agreements of any
kind relating to the foregoing, nor is the Company bound by or a
party to any options, licenses, or agreements of any kind with
respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary
rights and processes of any other person or entity. To its
knowledge after reasonable investigation, the Company has not
violated nor, by conducting its business as proposed, would violate
any of the
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patents, trademarks, service marks,
trade names, copyrights, or trade secrets or other proprietary
rights of any other person or entity and the Company has not
received any communication alleging such a violation or alleging
that the conduct of the business as proposed to be conducted, would
constitute such a violation. The Company has a valuable body of
trade secrets, including know-how, concepts, computer programs and
other technical data and proprietary rights and processes (the
“ Proprietary Information ”) for the
development, manufacture and sale of its products. To its knowledge
after reasonable investigation, the Company has the right to use
the Proprietary Information free and clear of any rights, liens,
encumbrances or claims of others, except that the possibility
exists that other persons may have independently developed trade
secrets or technical information similar or identical to those of
the Company. Since its formation, the Company has taken reasonable
measures to protect the value (and, to the extent applicable, the
confidentiality and security) of all Proprietary Information. The
Company is not aware of any such independent development nor of any
misappropriation of its Proprietary Information. The Company is not
aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with the use
of his or her best efforts to promote the interests of the Company
or that would conflict with the Company’s business as
proposed to be conducted. Neither the execution nor delivery of
this Agreement or the Notes nor the carrying on of the
Company’s business by the employees of the Company, nor the
conduct of the Company’s business as proposed, will, to the
Company’s knowledge after reasonable investigation, conflict
with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated. The
Company does not believe it is or will be necessary to utilize any
inventions of any of its employees (or people it currently intends
to hire) made prior to their employment by the Company. Set forth
in Section 2(h) of the Schedule of Exceptions is a list of all
patents, trademarks and licenses of the Company.
(i) Balance Sheet; Financial
Statements . The Company has made available to each Investor
its unaudited financial statements of December 31, 2005 and
its unaudited financial statements as of February 28, 2006
(collectively, the “ Financial Statements ”).
The Financial Statements have been prepared in accordance with
generally accepted accounting principles (“ GAAP
”) applied on a consistent basis. The Financial Statements do
not contain additional financial statements and footnotes required
under GAAP, and are subject to normal year-end adjustments. Except
as set forth in the Financial Statements, the Company has no
material liabilities, contingent or otherwise, other than
(i) liabilities incurred in the ordinary course of business
subsequent to the date thereof and (ii) obligations under
contracts and commitments incurred in the ordinary course of
business and not required under GAAP to be reflected in the balance
sheet, which, in both cases, individually or in the aggregate are
not material to the financial condition or operating results of the
Company. Set forth in the Schedule of Exceptions is a list,
effective as of the Closing, of all the amounts (including amounts
due for salaries or other compensation, reimbursement of expenses,
advances made to or on behalf of the Company, or services rendered
to or for the benefit of the Company) owed by the Company to each
director and officer.
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(j) Changes . Since
February 28, 2006, there has not been:
(i) any change in the assets,
liabilities, financial condition or operating results of the
Company from that reflected in the Balance Sheet, except changes in
the ordinary course of business that have not, in the aggregate,
had a Material Adverse Effect;
(ii) any damage, destruction or
loss, whether or not covered by insurance, having a Material
Adverse Effect;
(iii) any waiver or compromise by
the Company of a material debt owed to it;
(iv) any satisfaction or discharge
of any lien, claim, or encumbrance or payment of any obligation by
the Company, except in the ordinary course of business and not
having a Material Adverse Effect;
(v) any material change to a
material contract or agreement by which the Company or any of its
assets is bound or subject;
(vi) any material change in any
compensation agreement or agreement with any employee, officer,
director or stockholder;
(vii) any sale, assignment or
transfer of any patents, trademarks, copyrights, trade secrets or
other intangible assets;
(viii) any resignation or
termination of employment of any officer or key employee of the
Company; and the Company is not aware of any pending resignation or
termination of any such officer or key employee;
(ix) any mortgage, pledge, transfer
of a security interest on or lien, created by the Company, with
respect to any of its material properties or assets, except liens
for taxes not yet due or payable;
(x) any loans or guarantees made by
the Company to or for the benefit of its employees, officers or
directors or any members of their immediate families, other than
travel advances and other advances made in the ordinary course of
business;
(xi) any declaration, setting aside
or payment or other distribution in respect to any of the
Company’s capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such capital
stock by the Company, except the repurchase of shares of Common
Stock issued or held by employees, consultants, directors or
service providers of or to the corporation or any of its
subsidiaries upon termination of their employment or services
pursuant to agreements providing for the right of such repurchase
between the corporation and such persons and the repurchase of
shares of Common Stock in connection with the exercise of the right
of first refusal pursuant to agreements providing for the right of
first refusal between the Company and any of its
stockholders;
(xii) any material change in the
accounting methods or practices followed by the Company;
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(xiii) to the Company’s
knowledge, any other event or condition that might have a Material
Adverse Effect; or
(xiv) any arrangement or commitment
to do any of the things described in clauses (i) –(xiii)
above.
3. Representations and
Warranties of Investors . Each Investor, for that Investor
alone, represents and warrants to the Company upon the acquisition
of the Note as follows:
(a) Binding Obligation . Such
Investor has full legal capacity, power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. Each of this Agreement and the Note issued to such
Investor is a valid and binding obligation of the Investor,
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors’ rights
generally and general principles of equity.
(b) Securities Law Compliance
. Such Investor has been advised that the Notes, and the underlying
securities have not been registered under the Securities Act, or
any state securities laws and, therefore, cannot be resold unless
they are registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration
requirements is available. Such Investor is aware that the Company
is under no obligation to effect any such registration with respect
to the Notes, or to file for or comply with any exemption from
registration. Such Investor has not been formed solely for the
purpose of making this investment and is purchasing the Notes to be
acquired by such Investor hereunder for its own account for
investment, not as a nominee or agent, and not with a view to, or
for resale in connection with, the distribution thereof. Such
Investor has such knowledge and experience in financial and
business matters that such Investor is capable of evaluating the
merits and risks of such investment, is able to incur a complete
loss of such investment and is able to bear the economic risk of
such investment for an indefinite period of time. Such Investor is
an accredited investor as such term is defined in Rule 501 of
Regulation D under the Securities Act.
(c) Access to Information .
Such Investor acknowledges that the Company has given such Investor
access to the corporate records and accounts of the Company and to
all information in its possession relating to the Company, has made
its officers and representatives available for interview by such
Investor, and has furnished such Investor with all documents and
other information required for such Investor to make an informed
decision with respect to the purchase of the Notes.
4. Conditions to Closing of
the Investors . Each Investor’s obligations at the
Closing are subject to the fulfillment, on or prior to the Closing
Date, of all of the following conditions, any of which may be
waived in whole or in part by all of the Investors:
(a) Representations and
Warranties . The representations and warranties made by the
Company in Section 2 hereof shall be true and correct
on the Closing Date.
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(b) Governmental Approvals and
Filings . Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state
securities commissions, the Company shall have obtained all
governmental approvals required in connection with the lawful sale
and issuance of the Notes.
(c) Legal Requirements . At
the Closing, the sale and issuance by the Company, and the purchase
by the Investors, of the Notes shall be legally permitted by all
laws and regulations to which the Investors or the Company are
subject.
(d) Proceedings and Documents
. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents and
instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Investors.
(e) Legal Opinion. Wilson
Sonsini Goodrich & Rosati, P.C. shall have provided an
opinion in form and substance reasonably satisfactory to the
Investors.
(f) Waiver of Preemptive
Rights . The Company shall have delivered to each Investor
evidence in form and substance reasonably satisfactory to such
Investor evidencing the waiver of all rights of first offer or
preemptive rights with respect to the Notes and the securities
issuable upon conversion of the Notes by the requisite number of
investors party to the Company’s Fourth Amended and Restated
Investors’ Rights Agreement, dated as of May 4, 2006,
among the Company and the parties thereto.
5. Conditions to Obligations
of the Company . The Company’s obligation to issue
and sell the Notes at the Closing is subject to the fulfillment, on
or prior to the Closing Date, of the following conditions, any of
which may be waived in whole or in part by the Company:
(a) Representations and
Warranties . The representations and warranties made by the
Investors in Section 3 hereof shall be true and correct
on the Closing Date.
(b) Governmental Approvals and
Filings . Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state
securities commissions, the Company shall have obtained all
governmental approvals required in connection with the lawful sale
and issuance of the Notes.
(c) Legal Requirements . At
the Closing, the sale and issuance by the Company, and the purchase
by the Investors, of the Notes shall be legally permitted by all
laws and regulations to which the Investors or the Company are
subject.
6. Miscellaneous
.
(a) Waivers and Amendments .
Any provision of this Agreement may be amended, waived or modified
only upon the written consent of the Company and Investors holding
a Majority in Interest.
(b) Governing Law . This
Agreement and all actions arising out of or in connection with this
Agreement shall be governed by and construed in accordance with the
laws of
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the State of California, without
regard to the conflicts of law provisions of the State of
California or of any other state.
(c) Survival. The
representations, warranties, covenants and agreements made herein
shall survive the execution and delivery of this
Agreement.
(d) Successors and Assigns .
Subject to the restrictions on transfer described herein, the
rights and obligations of the Company and the Investors shall be
binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
(e) Entire Agreement . This
Agreement together with the other Transaction Documents constitute
and contain the entire agreement among the Company and Investors
and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter
hereof.
(f) Notices . All notices,
requests, demands, consents, instructions or other communications
required or permitted hereunder shall in writing and faxed, mailed
or delivered to each party as follows: (i) if to a Investor,
at such Investor’s address or facsimile number set forth in
the Schedule of Investors attached as Schedule I , or
at such other address as such Investor shall have furnished the
Company in writing, or (ii) if to the Company, at 11 Columbia,
Suite A, Aliso Viejo, CA 92656, facsimile: 949.362.0300, attn:
Chief Executive Officer, or at such other address or facsimile
number as the Company shall have furnished to the Investors in
writing. All such notices and communications will
