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Exhibit 10.1 EXECUTION VERSION NOTE EXCHANGE
AGREEMENT THIS NOTE EXCHANGE
AGREEMENT, dated as of January 20, 2009 (the "
Agreement "), is entered into by and between BMP Sunstone
Corporation, a Delaware corporation (the " Company "), and
the person identified as the "Noteholder" on Schedule A
hereto (the " Noteholder ", and together with the Company,
the " Parties "). RECITALS
WHEREAS, the Noteholder is the holder
of a 10.0% Senior Secured Promissory Note due May 1, 2009 in
the principal amount set forth on Schedule A hereto
(the " Original Note ");
WHEREAS, the Noteholder and the
Company desire to exchange the Original Note for a 12.5% Secured
Convertible Note due July 1, 2011 in a principal amount set
forth on Schedule A hereto and in the form attached as
Exhibit A hereto (the " Exchange Note "); and
WHEREAS, this Agreement is one of a
series of note exchange agreements by which certain Original Notes
are being exchanged for Exchange Notes.
NOW, THEREFORE, in consideration of
the premises, and of mutual covenants contained herein and the
mutual benefits to be derived therefrom, the Noteholder and the
Company agree as follows: ARTICLE 1 EXCHANGE
1.1 Exchange . Each of
the Company and the Noteholder hereby agree to exchange the
Original Note for the Exchange Note (the " Exchange ") and
to take all actions necessary to consummate the Exchange;
provided , however , this Agreement shall be void
ab initio unless and until at least $10.0 million in
principal amount of Original Notes agree to an Exchange.
1.2 Cancellation and
Issuance .
1.2.1
Upon execution of this Agreement by the Parties,
(a) the
Exchange shall be effective, the notes representing the Original
Note will be deemed cancelled and the Exchange Note shall be deemed
issued;
(b) the
Parties shall execute and deliver a Pledge Agreement (the "
Pledge Agreement ") in the form attached as
Exhibit B hereto;
(c) the
Company shall deliver to the Noteholder the executed Share Escrow
Agreement (the " Share Escrow Agreement ") in the form of
Exhibit C hereto; and
(d) the
Company shall deliver to the Noteholder the executed Interest
Escrow Agreement (the " Interest Escrow Agreement ") in the
form of Exhibit D hereto (this Agreement, the Exchange
Note, the Pledge Agreement, the Share Escrow Agreement and the
Interest Escrow Agreement are herein collectively referred to
herein as the "Transaction Documents").
1.2.2
On or as soon as practicable after the Closing Date, the Noteholder
shall surrender to the Company for cancellation the notes
representing the Original Note, which the Company shall promptly
cancel, and upon cancellation thereof the Company shall execute and
deliver to the Noteholder an executed copy of the Exchange Note. On
or as soon as practicable after the Closing Date, the Noteholder
shall deliver to the Company a completed and executed IRS W-9 Form
of the Noteholder.
1.2.3
On April 1, 2009, the Company shall pay to Noteholder all
accrued but unpaid interest on the Original Notes, for the period
from and including November 2, 2008 through but not including
the Closing Date, from the escrow account maintained by CSC Trust
Company of Delaware, pursuant to the Interest Escrow Agreement.
1.2.4
Promptly following the Closing Date, the Company shall cause Bryn
Mawr Trust Company to transfer to the Escrow Agent (as defined
under the Interest Escrow Agreement) from its escrow account
maintained by Bryn Mawr Trust Company, pursuant to the Escrow
Agreement, dated November 1, 2007, between the Company and
Bryn Mawr Trust Company, an amount equal to the aggregate interest
payment on the Original Notes being surrendered for the period from
and including November 2, 2008 through and including
May 1, 2009. 1.3
Closing . The closing (the " Closing ") of the
Exchange shall occur upon execution of this Agreement and the
Transaction Documents to which the Noteholder is a party (the "
Closing Date "). ARTICLE 2 REPRESENTATIONS AND
WARRANTIES BY THE COMPANY The
Company represents and warrants to the Noteholder that:
2.1 Organization, Good
Standing . The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware. 2.2 Conversion
Shares . All shares of common stock, par value $0.001 (the
" Common Stock ") of the Company which may be issued upon
the conversion of the Exchange Note (the " Conversion Shares
"), upon issuance in accordance with the terms of the Exchange
Note, will be duly authorized, validly issued, fully paid and
non-assessable. The Company has taken and shall continue to take
all such actions as may be required to ensure that the Company
shall at all times have authorized and reserved a sufficient number
of shares of Common Stock to provide for the conversion of the
Exchange Note into Conversion Shares.
2.3 Authority . The
execution, delivery and performance of, and compliance with, the
Transaction Documents, the issuance of the Exchange Note in
exchange for the Original Note and the issuance of the Conversion
Shares have been duly authorized by all necessary corporate action
on the part of the Company The Transaction Documents are valid and
binding
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agreements of the Company and are enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting
creditors’ rights and remedies generally, and subject, as to
enforceability to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity). ARTICLE 3
REPRESENTATIONS AND WARRANTIES BY THE NOTEHOLDER
The Noteholder hereby represents and
warrants to the Company that: 3.1
Authority Relative to this Agreement and Transaction
Documents . The execution, delivery and performance of, and
compliance with, this Agreement, and the Transaction Documents
contemplated hereunder to which the Noteholder is a party, by the
Noteholder and the terms of the Exchange have been duly authorized
by all necessary action on the part of the Noteholder. The
Transaction Documents to which the Noteholder is a party are valid
and binding agreements of the Noteholder, enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting
creditors’ rights and remedies generally, and subject, as to
enforceability to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity). 3.2
Ownership . The Noteholder is the sole record and
beneficial owner of the Original Note and has good title to the
Original Note free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, conditional sales contract,
transfer restriction, right of first refusal, voting trust
agreement, preemptive right, or other adverse claim, defect of
title, limitation or restriction of any type or nature whatsoever.
3.3 Access . The
Noteholder has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s
management. The Noteholder has had full opportunity to seek the
advice of independent counsel with respect to the Exchange and the
tax risks and implications thereof. ARTICLE 4
COVENANTS 4.1
Lock-Up . The " Lock-Up Period " means the
period beginning on the date of this Agreement and ending on the
earlier of May 15, 2009 or the closing of the issuance of
shares of common stock of the Company in one or more offerings to
investors resulting in the receipt of proceeds, net of all
commissions, by the Company in an aggregate amount of at least
sixteen million dollars ($16,000,000). The Noteholder agrees that,
during the Lock-Up Period, the Noteholder will not, directly or
indirectly, (a) enter into any short sale or any purchase,
sale or grant of any right (including without limitation the
purchase of any long put option or writing of any call option)
which is designed to, or which
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