Exhibit 10.1
TRANSDEL PHARMACEUTICALS, INC.
SENIOR CONVERTIBLE NOTE PURCHASE AGREEMENT
     This Senior Convertible Note Purchase Agreement (the “Agreement”) is made
as of this ___day of April 2010 by and between Transdel Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and each of the undersigned purchasers as
listed on Schedule A attached to this Agreement (each a “Purchaser” and together
the “Purchasers”).
RECITALS
     The Company desires to issue and sell, and each Purchaser desires to
purchase, a senior convertible promissory note in substantially the form
attached to this Agreement as Exhibit A (the “Note” and collectively, the
“Notes”) which shall be convertible on the terms stated therein into equity
securities of the Company. The Notes and the securities issuable upon conversion
thereof (and the securities issuable upon conversion or exercise thereof) are
collectively referred to herein as the “Securities.”
AGREEMENT
     In consideration of the mutual promises contained herein and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties to
this Agreement agree as follows:
     1. Purchase and Sale of Notes.
          (a) Sale and Issuance of Notes. Subject to the terms and conditions of
this Agreement, each Purchaser agrees to purchase at the Closing (as defined
below) and the Company agrees to sell and issue to each Purchaser a Note in the
principal amount set forth opposite such Purchaser’s name on Schedule A. The
purchase price of each Note shall be equal to 100% of the principal amount of
such Note.
          (b) Closing; Delivery.
               (i) The purchase and sale of the Notes shall take place at the
offices of DLA Piper, 4365 Executive Drive 11th Floor, San Diego, California
92121 at 10:00 a.m., on April ___, 2010, or at such other time and place as the
Company and the participating Purchaser(s) mutually agree upon, orally or in
writing (which time and place are designated as the “Initial Closing”). After
the Initial Closing, the Company may complete one or more additional closings
with Purchasers. In the event there is more than one closing, the term “Closing”
shall apply to each such closing.
               (ii) At each Closing, the Company shall deliver to each Purchaser
participating in such Closing the Note to be purchased by such Purchaser against
(1) payment of the purchase price therefor by check payable to the Company or by
wire transfer to a bank account designated by the Company and (2) delivery of
counterpart signature pages to this Agreement.

 

--------------------------------------------------------------------------------

 

               (iii) Until April 30, 2010, the Company may sell additional Notes
to such persons or entities as determined by the Company, or to any Purchaser
who desires to acquire additional Notes, until the Company issues $1,000,000 of
Notes in the aggregate. All such sales shall be made on the terms and conditions
set forth in this Agreement. For purposes of this Agreement, and all other
agreements contemplated hereby, any additional purchaser so acquiring Notes
shall be deemed to be a “Purchaser” for purposes of this Agreement, and any
notes so acquired by such additional purchaser shall be deemed to be “Notes” and
“Securities” as applicable.
     2. Additional Agreements. Each Purchaser understands and agrees that the
conversion of the Notes into securities of the Company will require such
Purchaser’s execution of certain agreements relating to the purchase and sale of
such securities as well as any rights relating to such securities, and each such
Purchaser agrees to execute and deliver such agreements to the Company upon
request.
     3. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser that the following representations are
true and complete as of the date of the Initial Closing, unless otherwise
indicated:
          (a) Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has all requisite corporate power and authority
to carry on its business as presently conducted and as currently proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
          (b) Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement and the authorization, sale, issuance
and delivery of the Notes and the Securities issuable on conversion thereof, and
the performance of all obligations of the Company under this Agreement and the
Notes has been taken or will be taken prior to the Closing. The Agreement and
the Notes, when executed and delivered by the Company, shall constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies.
     4. Representations and Warranties of the Purchasers. Each Purchaser hereby
represents and warrants to the Company that:
          (a) Authorization. The Purchaser has full power and authority to enter
into this Agreement. This Agreement, when executed and delivered by the
Purchaser, will constitute a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally, and as limited by laws relating to
the availability of a specific performance, injunctive relief, or other
equitable remedies.

-2-

--------------------------------------------------------------------------------

 

          (b) Purchase Entirely for Own Account. This Agreement is made with the
Purchaser in reliance upon the Purchaser’s representation to the Company, which
by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms,
that the Securities to be acquired by the Purchaser will be acquired for
investment for the Purchaser’s own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that the Purchaser does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. If the Purchaser is a corporation, partnership or other entity, the
Purchaser has not been formed for the specific purpose of acquiring any of the
Securities.
          (c) Knowledge. The Purchaser is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities.
          (d) Restricted Securities. The Purchaser understands that the
Securities have not been, and will not be, registered under the Securities Act
of 1933, as amended (the “Securities Act”), by reason of a specific exemption
from the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the Purchaser’s representations as expressed herein. The Purchaser understands
that the Securities are “restricted securities” under applicable U.S. federal
and state securities laws and that, pursuant to these laws, the Purchaser must
hold the Securities indefinitely unless they are registered with the Securities
and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. The Purchaser
acknowledges that the Company has no obligation to register or qualify the
Securities for resale. The Purchaser further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned on
various requirements including, but not limited to, the time and manner of sale,
the holding period for the Securities, and on requirements relating to the
Company which are outside of the Purchaser’s control, and which the Company is
under no obligation and may not be able to satisfy.
          (e) No Public Market. The Purchaser understands that no public market
now exists for any of the Notes issued by the Company or any Securities of the
Company other than the Company’s Common Stock, and that the Company has made no
assurances that a public market will ever exist for the Notes or any other
Securities of the Company other than the Company’s Common Stock.
          (f) Legends. The Purchaser understands that the Securities, and any
securities issued in respect thereof or exchange therefor, may bear one or all
of the following legends:
               (i) “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO

-3-

--------------------------------------------------------------------------------

 

THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”
               (ii) Any legend required by the securities laws of any state to
the extent such laws are applicable to the shares represented by the certificate
so legended.
          (g) Accredited Investor. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
          5. Conditions of the Purchasers’ Obligations at Closing. The
obligations of each Purchaser to the Company under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
          (a) Representations and Warranties. The representations and warranties
of the Company contained in Section 3 shall be true and correct in all material
respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Initial Closing.
          (b) Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be obtained and effective as of the
Closing.
     6. Conditions of the Company’s Obligations at Closing. The obligations of
the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
          (a) Representations and Warranties. The representations and warranties
of each Purchaser contained in Section 4 shall be true and correct in all
material respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.
          (b) Qualifications. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be obtained and effective as of the
Closing.
     7. Senior Debt Covenant. So long as any Note(s) are outstanding, the
Company will not (either directly or by amendment, merger, consolidation, or
otherwise) without (a) obtaining the written consent of the Purchasers holding a
majority-in-interest of the then outstanding Notes or (b) amending the Note(s)
then outstanding to provide the same terms and conditions of such new debt:
(i) create or authorize the creation of or issue any other debt instrument
having rights, preferences or privileges senior to (with respect to interest
rate or repayment terms, timing and manner of payment, security interest,
priority of payment, conversion rights, equity or other securities issued in
connection with the debt) the Notes (not including trade credit or payables
incurred in the ordinary course of business) or (ii) grant any third party a
security interest in the Company’s assets, including its intellectual property.
Notwithstanding Section 8(g), any amendment to improve the terms and conditions
of the

-4-

--------------------------------------------------------------------------------

 

Note(s) in accordance with the provisions of this Section 7, shall be
automatically binding on the Purchasers without the need to obtain the agreement
or consent of any of the Purchasers.
     8. Miscellaneous.
          (a) Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties, including transferees of any Securities. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
          (b) Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
          (c) Counterparts. This Agreement may be executed in two or more
counter-parts, each of which shall be deemed an original and all of which
together shall constitute one instrument. By executing this Agreement, the
Purchaser agrees to be bound by and to be a party to the Note.
          (d) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
          (e) Notices. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by fax (upon customary confirmation
of receipt), or 48 hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified at
such party’s address as set forth on the signature page or Schedule A hereto, or
as subsequently modified by written notice.
          (f) Finder’s Fee. Each party represents that it neither is nor will be
obligated for any finder’s fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder’s fee arising out of the transaction (and the costs and expenses of
defending against such liability or asserted liability) for which each Purchaser
or any of its officers, employees, or representatives is responsible. The
Company agrees to indemnify and hold harmless each Purchaser from any liability
for any commission or compensation in the nature of a finder’s fee arising out
of the transaction (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
          (g) Amendments and Waivers. Any term of this Agreement may be amended
or waived only with the written consent of the Company and the Purchasers
holding at least a majority in interest of the then outstanding Notes. Any
amendment or waiver effected in accordance with this Section 8(g) shall be
binding upon each Purchaser and each of the Notes

-5-

--------------------------------------------------------------------------------

 

and each transferee of such Securities, each future holder of all such
Securities, and the Company, regardless of whether or not the Purchaser agrees
with or provides his, her or its consent to such amendment or waiver.
          (h) Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as though
such provision were so excluded and shall be enforceable in accordance with its
terms.
          (i) Entire Agreement. This Agreement, and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
existing between the parties hereto are expressly canceled.
          (j) Exculpation Among Purchasers. Each Purchaser acknowledges that it
is not relying upon any person, firm or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Securities.
          (k) Stockholders, Officers and Directors Not Liable. In no event shall
any stockholder, officer or director of the Company be liable for any amounts
due or payable pursuant to the Note.
[Signature Pages Follow]

-6-

--------------------------------------------------------------------------------

 

     The parties have executed this Senior Convertible Note Purchase Agreement
as of the date first written above.

            COMPANY:

Transdel Pharmaceuticals, Inc.
      By:           Name:           Its:           Address:                     
                   

            PURCHASERS:
                 Name:           Its:           Address:                       
                 

[SIGNATURE PAGE TO SENIOR CONVERTIBLE
NOTE PURCHASE AGREEMENT