FORECLOSURE SALE AGREEMENT
 
This FORECLOSURE SALE AGREEMENT (the “Agreement”) is entered into as of
September ___, 2010 by and among Venture Lending & Leasing IV, Inc. (“VLL4”),
Venture Lending & Leasing V, Inc. (“VLL5”), Silicon Valley Bank (“SVB”) and
Xenogenics Corporation, a Nevada corporation (“Purchaser”).  VLL4, VLL5 and SVB
are sometimes referred to hereinafter collectively, as “Sellers” and
individually as a “Seller” and VLL5, in its capacity as collateral agent for the
Sellers under the Loan Agreement (as defined below) is sometimes referred to
herein as “Agent.”
 
RECITALS
 
On March 18, 2008, Bioabsorbable Therapeutics, Inc., a Delaware corporation
(“Debtor”), Agent and Sellers entered into that certain Loan and Security
Agreement (as amended from time to time collectively referred to as the “Loan
Agreement”) pursuant to which Sellers made term loans to Debtor.
 
In order to secure the prompt payment and performance of all obligations owing
by Debtor to Agent and Sellers under the Loan Agreement (all of such obligations
with respect to the loans and under the Loan Agreement and related documents are
collectively referred to herein as the “Obligations”), Debtor granted to each
Seller and to Agent for the benefit of Sellers blanket security interests in all
of Debtor’s property (the “Collateral”).  Sellers’ and Agent’s security
interests in the Collateral were perfected by the filing of UCC Financing
Statement with the Delaware Secretary of State recorded on March 20, 2008 as
file number 80990299.
 
On September 2, 2009, Sellers notified Debtor that an Event of a Default had
occurred under the Loan Agreement.  As a result of the occurrence of such Event
of Default Sellers accelerated the Obligations and such Obligations are now due
and payable.
 
Pursuant to the terms of the Loan Agreement, the loan documents executed and
delivered in connection therewith and applicable law, after the occurrence and
during the continuance of an Event of Default, Sellers have the right to enforce
all of their remedies against Debtor and the Collateral, and Sellers have
elected to conduct a private foreclosure sale of certain items of the
Collateral.
 
Pursuant to that certain Repossession Agreement for Peaceable Foreclosure, dated
as of September 29, 2009, a true, correct and complete copy of which is attached
hereto as Exhibit “A” (the “Peaceful Foreclosure Agreement”), Debtor waived its
rights to notice of any private sale under Section 9611 of the California
Commercial Code (“CUCC”), waived its right to redeem the Collateral under
Section 9623 of the CUCC and waived its rights to any further notice of sale or
other disposition to the extent permitted under applicable law, and agreed that
Agent and Sellers are not required to give Debtor notice of any proposed sale or
other disposition of the Collateral.
 
Pursuant to the Peaceful Foreclosure Agreement, Sellers exercised their post
defaults rights under the CUCC with respect to the Collateral and subject to the
terms and conditions of this Agreement, Sellers have agreed to sell to
Purchaser, all of Debtor’s right, title and interest in the Collateral described
on Exhibit “B” (the items Collateral described on Exhibit “B” are hereinafter
referred to as the “Transferred Assets”).

 

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AGREEMENT
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and Sellers hereby agree as follows:
 
1.           Sale of Transferred Assets.  Upon the terms and subject to the
conditions of this Agreement, in consideration of and in exchange for Sellers’
receipt of the consideration described in Section 2 hereof, Sellers agree, on
the Closing Date (as defined herein), to irrevocably sell, transfer, assign,
convey, and set over to Purchaser, and Purchaser agrees to purchase from
Sellers, all of Debtor’s right, title and interest in the Transferred Assets,
“as is”, “where is”, and without recourse, and (except as set forth in Section 7
below) without representations or warranties of any kind, express or implied,
including, without limitation, any warranties as to title, possession, quiet
enjoyment, merchantability, value, useful life, fitness for intended use,
physical condition, non-infringement, or similar representations and warranties.
Moreover, Sellers make no representation or warranty and have no liability
whatsoever on behalf of Debtor or any third parties with regard to the
operation, performance, nonperformance, quality, availability, completeness,
validity, or accuracy of any of the Transferred Assets or the delay, error, or
interruption of the flow of information in connection with use of any of the
foregoing.  In addition, notwithstanding anything to the contrary contained
herein or in the Bill of Sale, the Transferred Assets shall not, except to the
extent permitted by applicable law, include, to the extent prohibited by any
license or other agreement, any software or other licensed products that may be
installed on or attached to the Transferred Assets.  On the Closing Date,
Sellers and Purchaser shall execute and deliver to each other a Bill of Sale,
substantially in the form attached hereto as Exhibit “C” (the “Bill of Sale”), a
Patent Transfer Statement (as contemplated by 9619 of the CUCC), substantially
in the form attached hereto as Exhibit “D”  (the “Patent Transfer Statement”),
and a Trademark Transfer Statement (as contemplated by 9619 of the CUCC),
substantially in the form attached hereto as Exhibit “E” (the
“Trademark  Transfer Statement”), each executed by Sellers and Purchaser.  The
sale and transfer of the Transferred Assets to Purchaser hereunder shall be made
pursuant to Section 9610 of the CUCC and shall constitute a “disposition” under
the CUCC.  Purchaser shall constitute and have the rights of a “transferee”
under the provisions of the CUCC, including without limitation, the provisions
of Section 9617 of the CUCC.
 
2.           Consideration.  As consideration for the sale, transfer, and
conveyance of all the Transferred Assets by Sellers, Purchaser agrees:
 
(a)           to pay Four Hundred Thousand Dollars ($400,000) in cash (the
“Purchase Price”).  The Purchase Price shall be divided into three (3) tranches
in the following amounts (i) One Hundred Thirty-Five Thousand Dollars
($135,000), which shall be referred to herein as the “First Tranche” of the
Purchase Price, (ii) One Hundred Thirty-Five Thousand Dollars ($135,000), which
shall be referred to herein as the “Second Tranche” of the Purchase Price, and
(iii) One Hundred Thirty Thousand Dollars ($130,000), which shall be referred to
herein as the “Third Tranche” of the Purchase Price.  The First Tranche of the
Purchase Price shall be paid at Closing (as defined below), the Second Tranche
of the Purchase Price shall be due and payable on the earlier of November 15,
2010 and the closing of a Change in Control (as defined below), and the Third
Tranche of the Purchase Price shall be due and payable on the earlier of
December 31, 2010 and the closing of a Change in Control.  Each Tranche of the
Purchase Price shall be paid by wire transfer pursuant to the wire instructions
listed on Exhibit “F” or such other instructions as have been provided to
Purchaser by Sellers;

 
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(b)           at Closing, each of VLL4, VLL5 and SVB shall be issued a warrant
instrument, substantially in the form of Exhibit “G” attached hereto (each a
“Warrant” and together the “Warrants”);
 
(c)           upon the earliest to occur of (i) commencement of pivotal
Generation 2 stent human clinical trial, or (ii) the execution of any agreement
between Purchaser and any Person (as defined below) anywhere in the world where
Purchaser grants either exclusive, co-exclusive or non-exclusive rights to the
Debtor’s bioabsorbable stent and related technology and intellectual property
acquired by Purchaser pursuant to this Agreement and the documents and
instruments executed and delivered in connection herewith, including but not
limited, to development rights, marketing and sales rights, manufacturing
rights, geographic distribution rights, or commercialization rights (as
applicable, a “Partnership Agreement”) of at least $3 million in Total Value (as
defined below), or (iii) the closing of a Change in Control (such earliest event
being the “First Milestone”) to pay Three Hundred Thousand Dollars ($300,000) in
cash (the “First Milestone Payment”) by wire transfer pursuant to the wire
instructions listed on Exhibit “F” or such other instructions as have been
provided to Purchaser by Sellers. Purchaser agrees to notify Sellers promptly
after the First Milestone occurs (but no later than five (5) days thereafter),
and to make the First Milestone Payment as soon as practical following the
occurrence of the First Milestone (but no later than five (5) days thereafter);
 
(d)           upon the earliest to occur of (i) the first (1st) regulatory
approval by any regulatory authority in a European Union (EU) member country, or
(ii) the execution of a Partnership Agreement of at least $5 million in Total
Value, or (iii) the closing of a Change in Control (such earliest event being
the “Second Milestone”) to pay One Million Dollars ($1,000,000) in cash (the
“Second Milestone Payment”) by wire transfer pursuant to the wire instructions
listed on Exhibit “F” or such other instructions as have been provided to
Purchaser by Sellers. Purchaser agrees to notify Sellers promptly after the
Second Milestone occurs (but no later than five (5) days thereafter) and to make
the Second Milestone Payment as soon as practical following the occurrence of
the Second Milestone (but no later than five (5) days thereafter); and
 
(e)           upon the earliest to occur of (i) the first (1st) regulatory
approval by the U.S. Food and Drug Administration, or (ii) the execution of a
Partnership Agreement of at least $5 million in Total Value, or (iii) the
closing of a Change in Control (such earliest event being the “Third Milestone”)
to pay Three Million Dollars ($3,000,000) in cash (the “Third Milestone Payment”
and together with First Milestone Payment and the Second Milestone Payment, the
“Milestone Payments”) by wire transfer pursuant to the wire instructions listed
on Exhibit “F” or such other instructions as have been provided to Purchaser by
Sellers. Purchaser agrees to notify Sellers promptly after the Third Milestone
occurs (but no later than five (5) days thereafter) and to make the Third
Milestone Payment as soon as practical following the occurrence of the Third
Milestone (but no later than five (5) days thereafter).

 
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As used herein, the term “Total Value” means all up-front monies received upon
signing of the Partnership Agreement described in Section 2(c)(ii) and
Sections 2(d)(ii) and 2(e)(ii), as applicable, plus the net present value of all
future milestone payments and royalties.
 
As used herein, the term “Change in Control” means the first to occur of: (i)(A)
except in the event Purchaser’s majority shareholder dividends its ownership
position to its shareholders, the closing of any consolidation or merger of
Purchaser with or into any other corporation or other entity or person, or any
other corporate reorganization, other than any such consolidation, merger or
reorganization in which the stockholders of Purchaser immediately prior to such
consolidation, merger or reorganization, continue to hold a majority of the
voting power of the surviving entity in substantially the same proportions (or,
if the surviving entity is a wholly owned subsidiary, its parent) immediately
after such consolidation, merger or reorganization, or (B) except in the case of
an equity financing of the Purchaser within six (6) months of the Closing Date
where gross proceeds received by Purchaser are less than $10 million, the
closing of any transaction or series of related transactions to which Purchaser
is a party in which in excess of fifty percent (50%) of Purchaser’s voting power
is transferred; (ii) the closing of a transaction in which Purchaser sells,
leases, assigns, transfers, conveys or disposes of all or substantially all of
its assets. As used herein, the term “Person” means any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, public benefit
corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality,
division, agency, body or department thereof).
 
3.           Closing.  Subject to satisfaction of the conditions precedent set
forth in Sections 5 and 6 below, the closing of the sale of the Transferred
Assets (the “Closing”) will be held immediately following satisfaction or waiver
(by the party for whose benefit such condition exists) of the conditions set
forth in Sections 5 and 6.  The date on which the Closing is consummated is
referred to herein as a “Closing Date.”
 
4.           Delivery of Possession.  Sellers shall use their commercially
reasonable efforts to cause delivery of control or possession of the Transferred
Assets to Purchaser as soon as practicable following Closing.
 
5.           Sellers’ Conditions Precedent.  Sellers’ obligations to consummate
the Closing shall be conditioned upon the satisfaction or waiver of the
following:
 
(a)           The representations, warranties, and covenants of Purchaser made
herein shall have been true in all material respects when made and at all times
after the date when made, to and including the Closing Date, with the same force
and effect as if made on and as of each such times, including the Closing Date.
 
(b)           As of the Closing Date, neither the sale of the Transferred Assets
by Sellers nor any of the transactions contemplated hereby is prohibited by any
stay or injunction in any litigation, governmental action, or other proceeding,
including, without limitation, the “automatic stay” under 11 U.S.C. § 362 in any
pending case under title 11 of the United States Code by or against Debtor.

 
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(c)           Purchaser shall have paid the First Tranche of the Purchase Price.
 
(d)           Original counterparts of the Warrants shall have been duly
executed and delivered by Purchaser, shall have been delivered to Agent or its
counsel, shall be in full force and effect and shall be in form and substance
satisfactory to Sellers.
 
(e)           There has not occurred any material adverse change in Purchaser.
 
(f)           The Closing occurs on or before October 31, 2010.
 
6.           Purchaser’s Conditions Precedent.  Purchaser’s obligations to
consummate the Closing shall be conditioned upon the satisfaction or waiver of
the following:
 
(a)           The representations, warranties, and covenants of Sellers made
herein shall have been true in all material respects when made and at all times
after the date when made, to and including the Closing Date, with the same force
and effect as if made on and as of each such times, including the Closing Date.
 
(b)           As of the Closing Date, neither the sale of the Transferred Assets
by Sellers nor any of the transactions contemplated hereby is prohibited by any
stay or injunction in any litigation, governmental action, or other proceeding,
including, without limitation, the “automatic stay” under 11 U.S.C. § 362 in any
pending case under title 11 of the United States Code by or against Debtor.
 
(c)           Sellers and Purchaser shall have executed and delivered to
Purchaser the Bill of Sale, the Patent Transfer Statement and the Trademark
Transfer Statement.
 
(d)           Third party consents to the assignment of any material contracts
have been obtained.
 
(e)           Purchaser has successfully renegotiated the Rutgers’ licenses on
terms satisfactory to Purchaser.
 
(f)           There has not occurred any material adverse change in the
Transferred Assets.
 
7.           Representations and Warranties of Sellers.  Except as to each
Seller’s representations and warranties as to due authority and the like as
expressly provided below, the Transferred Assets are being sold “as is,” and
“where is” with no express or implied representation and warranties of any kind,
nature, or type whatsoever from, or on behalf of, such Seller.  Notwithstanding
the foregoing, each Seller severally, but not jointly, represents and warrants
to Purchaser, as follows:
 
(a)           Such Seller (i) is duly incorporated or organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation or organization, as applicable; and (ii) has all requisite power
and authority to execute, deliver, and perform the transactions contemplated
hereby.

 
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(b)           The execution, delivery, and performance by such Seller of this
Agreement and the consummation of the transaction contemplated hereby are within
the power of such Seller and have been duly authorized by all necessary actions
on the part of such Seller.  The execution of this Agreement by such Seller
constitutes, or will constitute, a legal valid and binding obligation of such
Seller, enforceable against such Seller 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.
 
(c)           To such Seller’s knowledge, no consent, approval, authorization or
order of, or registration or filing with, or notice to, any court or
governmental agency or body having jurisdiction or regulatory authority over
such Seller (or any of its properties) is required for (i) such Seller’s
execution and delivery of this Agreement (and each agreement executed and
delivered by it in connection herewith) or (ii) the consummation by such Seller
of the transactions contemplated by this Agreement (and each agreement executed
and delivered by it in connection herewith) or, to the extent so required, such
consent, approval, authorization, order, registration, filing or notice has been
obtained, made or given (as applicable) and is still in full force and effect.
 
(d)           No person or entity acting on behalf of such Seller or any of its
affiliates or under the authority of any of them is or will be entitled to any
brokers’ or finders’ fee or any other commission or similar fee, directly or
indirectly, from Seller or any of its affiliates in connection with any of the
transactions contemplated hereby, except for Emmes Group.
 
(e)           Such Seller holds a security interest in the Transferred Assets,
and to such Seller’s knowledge, based solely upon the results of Uniform
Commercial Code search requests of the offices of the Secretary of State of the
States of Delaware and California, both certified on September 16, 2010, there
are no outstanding security interests of record that are superior to the
security interests of such Seller in the Transferred Assets.
 
(f)           Debtor is in default of its obligations to such Seller, and such
Seller is entitled to sell the Transferred Assets under the terms of the Loan
Agreement, the provisions of the CUCC, and other applicable laws.
 
(g)           The disposition of the Transferred Assets effected by this
Agreement and the other documents and instruments executed and delivered in
connection herewith transfer to Purchaser all of Debtor’s rights therein,
discharges such Seller’s security interest therein (except for new security
interests granted by Purchaser as set forth in Section 13 of this Agreement),
and discharges any security interests or liens subordinate to the security
interest of such Seller.
 
(h)           Such Seller has complied in all material respects with the
relevant provisions of the CUCC, including without limitation the requirements
of Chapter 6 thereof, to transfer Debtor’s right, title and interest in and to
the Transferred Assets to Purchaser in accordance with the provisions of this
Agreement.
 
8.           Representations and Warranties of Purchaser.  Purchaser represents
and warrants to Sellers, as follows:

 
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(a)           Purchaser (i) is a duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization; and (ii) has all
requisite power and authority to execute, deliver, and perform the transactions
contemplated hereby.
 
(b)           The execution, delivery, and performance by Purchaser of this
Agreement and the consummation of the transaction contemplated hereby are within
the power of Purchaser and have been duly authorized by all necessary actions on
the part of Purchaser.  The execution of this Agreement by Purchaser
constitutes, or will constitute, a legal valid and binding obligation of
Purchaser, enforceable against Purchaser 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.
 
(c)           No consent, approval, authorization or order of, or registration
or filing with, or notice to, any court or governmental agency or body having
jurisdiction or regulatory authority over Purchaser (or any of its properties)
is required for (i) Purchaser’s execution and delivery of this Agreement (and
each agreement executed and delivered by it in connection herewith) or (ii) the
consummation by Purchaser of the transactions contemplated by this Agreement
(and each agreement executed and delivered by it in connection herewith) or, to
the extent so required, such consent, approval, authorization, order,
registration, filing or notice has been obtained, made or given (as applicable)
and is still in full force and effect.
 
(d)           No person or entity acting on behalf of Purchaser or Seller or any
of its affiliates or under the authority of any of them is or will be entitled
to any brokers’ or finders’ fee or any other commission or similar fee, directly
or indirectly, from Purchaser or any of its affiliates in connection with any of
the transactions contemplated hereby.
 
(e)           Purchaser has inspected and evaluated the Transferred Assets and
is aware of and relies solely on the representations and warranties of Sellers
contained herein and Purchaser’s knowledge of the value and condition of the
Transferred Assets.  Purchaser is familiar and sophisticated with respect to the
Transferred Assets.  Purchaser has conducted all inspections, reviews and/or
other due diligence deemed to be necessary and appropriate by Purchaser with
respect to the Transferred Assets (including with respect to any pending
litigation, threatened or potential inquiry, claim, investigation, litigation,
proceeding or decree by any federal, state or local authority, or administrative
agency, or any private party against or relating to the Transferred Assets,
including with respect to any claim that the Transferred Assets infringe any
third party’s intellectual property rights), and has made an informed and
independent decision with respect to this Agreement.
 
(f)           Sellers have not made any representation, warranty, statement of
fact, or expression of opinion to Purchaser with regard to the Transferred
Assets, except as stated herein, and Sellers are not now and were not previously
under any duty to do so.
 
9.           Expenses.  Except as set forth in Section 10, each party to this
Agreement shall be responsible for all costs and expenses incurred or expended
in connection with the transactions contemplated by this Agreement.

 
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10.           Transfer Taxes.  Purchaser shall be responsible for the payment of
all sales, use, value-added, gross receipts, excise, registration, stamp, duty,
transfer and other similar taxes or governmental fees relating to the transfer
of the Transferred Assets contemplated by this Agreement.  In addition,
Purchaser shall be responsible for the payment of all costs and expenses
relating to the transfer to Purchaser of the Transferred Assets (e.g.,
packaging, shipping, freight, delivery and the like); provided, however, that
Purchaser shall not be responsible for any costs or expenses relating to the
storage of the Transferred Assets or for the transfer of the Transferred Assets
prior to Closing.  On the Closing Date, Purchaser shall remit to Sellers any
sales tax due as a result of the transactions contemplated by this
Agreement.  Sellers hereby agree to file all necessary documents with respect to
such amounts in a timely manner.
 
11.           Notices.  Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing, and shall be deemed given
when personally delivered to a party set forth below or when sent by facsimile
providing a transmission confirmation (provided that such notice is immediately
sent by a recognized overnight delivery service), or three (3) days after mailed
by first class mail, registered, or certified, return receipt requested, postage
prepaid, or when delivered by nationally-recognized overnight delivery service,
with proof of delivery, delivery charges prepaid, in any case addressed as
follows:
 
To VLL4 & VLL5:
Venture Lending & Leasing IV, Inc.
 
Venture Lending & Leasing V, Inc.
 
2010 North First Street, Suite 310
 
San Jose, CA 95131
 
Attention: Chief Financial Officer
 
Fax: (408) 436-8625
   
To SVB:
Silicon Valley Bank
 
2400 Hanover Street
 
Palo Alto, CA 94304
 
Attention: Bellet Eliasnia
 
Fax: (650) 320-0016
   
To Purchaser:
Xenogenics Corporation
 
68 Cumberland Street, Suite 301
 
Woonsocket, RI 02895
 
Tel.: (401) 762-0045
 
FAX: (401) 762-0098
 
Attention: W. Gerald Newmin, Chairman & CEO

 
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12.           Covenants of Purchaser.  Purchaser shall exercise, and shall
require that all its affiliates, sub-licensees, partners, and acquirers use,
Good Faith Reasonable Efforts (as defined below) in developing and
commercializing Debtor’s bioabsorbable stent and related technology and
intellectual property acquired by Purchaser pursuant to the terms of this
Agreement and the documents and instruments executed and delivered in connection
with this Agreement.  “Good Faith Reasonable Efforts” shall mean: (i) those
efforts that are similar to the efforts used by medical device companies
generally in relation to other products under similar commercial circumstances
that have similar commercial value, status, and potential to the bioabsorbable
stent of Debtor acquired by Purchaser; and, (ii) achieving the following
development milestones for the Generation 2 device included in the Transferred
Assets: (a) restart manufacturing and produce a device within 12 months from
date of execution of this Agreement; (b) initiate an animal study within 18
months from date of execution of this Agreement; (c) make a regulatory
submission to support a human use clinical trial within 24 months from date of
execution of this Agreement; (d) initiate a human use clinical trial within 36
months from date of execution of this Agreement; and (e) make a regulatory
submission or equivalent for marketing approval for use in humans within 48
months from date of execution of this Agreement. Purchaser agrees to promptly
notify Agent after Purchaser achieves or fails to achieve each of the preceding
development milestones within the specified time periods.  Upon reasonable prior
notice at reasonable times during normal business hours, Purchaser hereby
authorizes Agent and each Seller’s officers, employees, representatives and
agents to inspect the Transferred Assets and to discuss the Transferred Assets
and the records relating thereto with Purchaser’s officers.
 
Notwithstanding anything to the contrary contained in this Agreement,
Purchaser’s failure at any time to exercise Good Faith Reasonable Efforts shall
result in all Milestone Payments not already paid by Purchaser to become
immediately due and payable to Sellers; provided, however, that in the event
Purchaser or its affiliates, sublicensees, partners or acquirers fails to use
Good Faith Reasonable Efforts developing and commercializing the bioabsorbable
stent and related technology and intellectual property of Debtor acquired by
Purchaser due to Technical Difficulties (as defined below) or Financial Hardship
(as defined below), Purchaser or its affiliates, sublicensees, partners or
acquirers can elect to: (i) pay all remaining Milestone Payments due to Sellers
and continue commercialization efforts, or (ii) assign all Intellectual Property
(as defined below) in favor of Sellers and cease all development and
commercialization efforts. As used herein the term “Technical Difficulties”
shall mean (i) reasons of force majeure, or (ii) the uncovering of an unforeseen
technical problem not the result of a lack of technical skill due to the hiring
of personnel inexperienced in the design, development and commercialization of
stents used in interventional cardiology and peripheral vasculature
applications; the term “Financial Hardship” shall mean the failure by Purchaser
or its affiliates, sublicensees, partners or acquirers to maintain at all times
at least $250,000 net cash; and the term “Intellectual Property” shall relate to
Debtor’s stent, and related technology and intellectual property and any
improvements thereof, and shall mean and include, without limitation, all:
(i) copyrights, trademarks, patents, patent applications, including all issues,
reissues, amendments divisions, continuations, continuations-in-part, and
corresponding foreign counterparts; and (ii) product designs, documentation,
drawings, schematics, formulations, SOPs, product concepts, manufacturing
processes, custom manufacturing equipment designs, quality standards, clinical
trial data, trade secrets, technical information relating to ongoing research
and development, business strategies, marketing plans, customer lists, and
financial data.

 
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13.          Security Interest.  To secure Sellers’ rights to receive the Second
Tranche of the Purchase Price and the Third Tranche of the Purchase Price, as
well as Sellers’ rights to receive the First Milestone Payment, the Second
Milestone Payment and the Third Milestone Payment, Purchaser hereby grant to
each Seller and Agent for the benefit of Sellers continuing security interests
in all of the Transferred Assets and the Proceeds (as such terms is defined in
the CUCC) thereof.  In connection with the foregoing, Purchaser authorizes Agent
and/or Sellers to prepare and file any financing statements describing the
Transferred Assets.  Purchaser agrees that Purchaser will do all things
reasonably necessary to maintain, preserve, protect and keep the Transferred
Assets in good working order, ordinary wear and tear excepted, utilize the
Transferred Assets for their intended use (as the same may be modified), and use
the Transferred Assets lawfully and, to the extent applicable, only as permitted
by Purchaser’s insurance policies.  In addition, Purchaser agrees to (a) not
create, incur, assume or permit to exist any lien, or grant any other Person a
negative pledge, on any of the Transferred Assets, (b) maintain, or cause to be
maintained, complete and accurate records relating to the Transferred Assets,
and (c) obtain and keep in force insurance in such amounts and types as is usual
in the type of business conducted by Purchaser, such insurance policies must be
in form and substance satisfactory to Sellers, and shall list each Seller as an
additional insured or loss payee, as applicable, on endorsement(s) in form
reasonably acceptable to Sellers. Purchaser shall furnish to Sellers such
endorsements, and upon Sellers’ request, copies of any or all such policies.  If
an Insolvency Proceeding (as defined below) occurs with respect to Purchaser (or
any successor), or Purchaser fails to timely pay the Second Tranche of the
Purchase Price or the Third Tranche of the Purchase Price when due, or Purchaser
fails to timely pay the First Milestone Payment or the Second Milestone Payment
when due then any of the foregoing shall constitute a default and Agent and
Sellers shall be entitled to exercise any or all of the rights and remedies
available to a secured party under the CUCC or any other applicable law. As used
herein, the term “Insolvency Proceeding” means with respect to Purchaser (or any
successor) (a) any case, action or proceeding before any court or other
governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding up or relief of debtors with
respect to Purchaser (or any successor), or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of Purchaser’s (or any successor’s)
creditors generally or any substantial portion of its creditors, undertaken
under U.S. Federal, state or foreign law, including the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended.
 
14.          Miscellaneous.
 
(a)           Entire Agreement.  This Agreement, together with the schedules and
exhibits attached hereto, constitutes the entire agreement of the parties hereto
regarding the purchase and sale of the Transferred Assets, and all prior
agreements, understandings, representations and statements, oral or written, are
superseded hereby.
 
(b)           Captions.  Section captions used in this Agreement are for
convenience only, and do not affect the construction of this Agreement.
 
(c)           Counterpart Execution.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or other means of
electronic transmission shall be effective as delivery of a manually executed
counterpart thereof and shall be deemed an original signature for all purposes
 
(d)           Severability.  If any provision of this Agreement shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid or unenforceable provision
had never been contained in this Agreement.

 
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(e)           Further Assurances.  At any time or from time to time after the
Closing, Sellers shall, at the request and expense of Purchaser, execute and
deliver such further instruments and documents as Purchaser may reasonably
request as may be reasonably necessary to evidence or effect the consummation of
the transactions contemplated by this Agreement.
 
(f)           Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Purchaser and Sellers.  No waiver by any party hereto of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
 
(g)           Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of California
(without reference to conflicts of law principles).
 
(h)           Waiver of Trial by Jury.  SELLERS, AGENT AND PURCHASER HEREBY
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE
OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN
ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE
PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.  SELLERS,
AGENT AND PURCHASER HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF
ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT
ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES
HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
 
(i)           Submission to Jurisdiction; Selection of Forum.  EACH PARTY HERETO
(A) AGREES THAT IT SHALL BRING ANY ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED IN OR
CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR IN
EQUITY, EXCLUSIVELY IN (I) THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF CALIFORNIA, SAN JOSE DIVISION, OR IN THE EVENT THAT SUCH COURT LACKS
SUBJECT MATTER JURISDICTION OVER THE ACTION OR PROCEEDING, (II) IN AN
APPROPRIATE CALIFORNIA STATE COURT IN SAN JOSE, CALIFORNIA (SUCH FEDERAL OR
STATE COURT IN SAN JOSE, CALIFORNIA IS HEREAFTER REFERRED TO AS THE “CHOSEN
COURT”) AND (B) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN
COURT, (C) WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION TO
LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURT, (D) WAIVES
ANY ARGUMENT THAT THE CHOSEN COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE
JURISDICTION OVER ANY PARTY THERETO, AND (E) AGREES THAT SERVICE OR PROCESS UPON
ANY PARTY IN ANY SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN
IN ACCORDANCE WITH SECTION 11 OF THIS AGREEMENT.

 
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(j)           WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO
WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the
right to a trial by jury is not enforceable, the parties hereto agree that any
and all disputes or controversies of any nature between them arising at any time
shall be decided by a reference to a private judge, mutually selected by the
parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara
County, California Superior Court) appointed in accordance with California Code
of Civil Procedure Section 638 (or pursuant to comparable provisions of federal
law if the dispute falls within the exclusive jurisdiction of the federal
courts), sitting without a jury, in Santa Clara County, California; and the
parties hereby submit to the jurisdiction of such court. The reference
proceedings shall be conducted pursuant to and in accordance with the provisions
of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The
private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing
preliminary and permanent injunctions and appointing receivers.  All such
proceedings shall be closed to the public and confidential and all records
relating thereto shall be permanently sealed.  If during the course of any
dispute, a party desires to seek provisional relief, but a judge has not been
appointed at that point pursuant to the judicial reference procedures, then such
party may apply to the Santa Clara County, California Superior Court for such
relief.  The proceeding before the private judge shall be conducted in the same
manner as it would be before a court under the rules of evidence applicable to
judicial proceedings.  The parties shall be entitled to discovery which shall be
conducted in the same manner as it would be before a court under the rules of
discovery applicable to judicial proceedings.  The private judge shall oversee
discovery and may enforce all discovery rules and order applicable to judicial
proceedings in the same manner as a trial court judge.  The parties agree that
the selected or appointed private judge shall have the power to decide all
issues in the action or proceeding, whether of fact or of law, and shall report
a statement of decision thereon pursuant to the California Code of Civil
Procedure § 644(a).  Nothing in this paragraph shall limit the right of any
party at any time to obtain provisional remedies.  The private judge shall also
determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph.
 
(k)           Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.  Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The
word “including” shall mean “including without limitation”.
 
(l)           No Third-Party Beneficiaries.  This Agreement shall not confer any
rights or remedies upon any person or entity other than the parties hereto and
their respective successors and permitted assigns.

 
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(m)           Successor and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns.  Purchaser may not assign its rights or interests under
this Agreement, or delegate all or any of its obligations or duties hereunder,
without the prior written consent of Sellers.  Sellers may assign their rights
and interests under this Agreement and may delegate all or any of their
obligations or duties hereunder by providing Purchaser with written notice
thereof.
 
(n)           Confidentiality.  Disclosure of the terms of this Agreement shall
be governed by the Confidentiality Agreement executed prior to the date here
among Purchaser and Sellers.
 
(o)           No Assumption of Liabilities.  For avoidance of doubt, Purchaser
shall not assume any liabilities in connection with the acquisition of the
Transferred Assets contemplated by this Agreement, including, without
limitation, any of Debtor’s existing debts or any liabilities of Debtor arising
prior to Closing.
 
(p)           IN NO EVENT WILL ANY PARTY BE LIABLE TO ANY OTHER PARTY, OR ANY
CUSTOMER OF PURCHASER OR OTHERS FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY OR SIMILAR DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS
OF DATA, GOODWILL, REVENUE, PROFITS, LATENT DEFECTS, LOSS OF CAPITAL, CLAIMS FOR
SERVICE INTERRUPTION, COSTS AND EXPENSES INCURRED IN THE REMOVAL OF TRANSFERRED
ASSETS), ARISING OUT OF OR IN CONNECTION WITH PURCHASER’S OR ITS CUSTOMERS’ OR
ANY OTHER PARTY’S USE, MAINTENANCE OR OPERATION OF ANY OF THE TRANSFERRED
ASSETS, IRRESPECTIVE OF THE CAUSE OF ACTION OR THEORY UPON WHICH LIABILITY FOR
SUCH DAMAGES MIGHT BE ALLEGED, INCLUDING BUT NOT LIMITED TO, INFRINGEMENT,
MISAPPROPRIATION, NEGLIGENCE, OR OTHER TORT, BREACH OF CONTRACT OR WARRANTY
(EXPRESS OR IMPLIED), STRICT LIABILITY OR OTHERWISE, WHETHER AT LAW, IN EQUITY
OR OTHERWISE, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
CLAIM FOR DAMAGES.
 
15.          Purchaser’s Right of Setoff.  Upon notice to Sellers specifying in
reasonable detail the basis for setoff, Purchaser may setoff any amount to which
it may be entitled as a result of (i) the inaccuracy of any representation or
the breach of any warranty made by Sellers herein or (ii) any failure by Sellers
to conduct the private disposition of the Transferred Assets in substantial
compliance with Section 9610 of the CUCC, in each case, against the remaining
payments due under Sections 2(a), 2(c), 2(d) and 2(e) hereof, with such setoffs
to be applied ratably to the remaining payments due to Sellers at the time of
such setoff.  The foregoing right of setoff shall be the exclusive monetary
remedy of Purchaser with respect to claims for damages in connection with the
inaccuracy of any representation or the breach of any warranty made by Sellers
herein or any failure by Sellers to conduct the private disposition of the
Transferred Assets in substantial compliance with Section 9610 of the CUCC.  The
remedy provided in this Section 15 shall terminate on the date that is eighteen
(18) months from the date hereof.
 
(The remainder of this page is intentionally left blank.  The signature page
follows.)

 
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IN WITNESS WHEREOF, Purchaser, Agent and Sellers have caused this Agreement to
be executed as of the day and year first above written.
 

 
SELLERS:
     
VENTURE LENDING & LEASING IV, INC.
     
By:
   
Name:
   
Its:
         
VENTURE LENDING & LEASING V, INC.,
 
as Agent and as a Seller
     
By:
   
Name:
   
Its:
         
SILICON VALLEY BANK
     
By:
   
Name:
   
Its:
         
PURCHASER:
     
XENOGENICS CORPORATION
     
By:
   
Name: W. Gerald Newmin
 
Its: Chairman & CEO

 
 

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EXHIBIT “A”
 
COPY OF PEACEFUL FORECLOSURE AGREEMENT

 

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September 29, 2009
 
VIA EMAIL
 
Bioabsorbable Therapeutics, Inc.
 
Re:         Repossession of Collateral
 
Ladies and Gentlemen:
 
Reference is made to the Loan and Security Agreement and Supplement thereto,
both dated as of March 18, 2008 (referred to herein together, and as the same
have been amended, restated, supplemented and modified from time to time, as the
“Loan Agreement”), among Bioabsorbable Therapeutics, Inc. (“Borrower”), Venture
Lending & Leasing IV, Inc. (“VLL4”), Venture Lending & Leasing V, Inc. (“VLL5”)
and Silicon Valley Bank (“SVB”).  VLL4, VLL5 and SVB are sometimes referred to
hereinafter collectively, as the “Lenders” and VLL5, in its capacity as
collateral agent for the Lenders under the Loan Agreement is sometimes referred
to herein as “Agent.”  All capitalized terms not otherwise defined in this
letter have the meanings ascribed to them in the Loan Agreement
 
Under the terms of the Loan Documents, Borrower granted to each Lender and Agent
for the benefit of the Lenders security interests in all existing and after
acquired personal property of Borrower, including, but not limited to, all
accounts, contract rights, general intangibles, intellectual property,
inventory, equipment, fixtures, securities, investment property, cash, deposit
accounts, goods and any interests therein and all proceeds of the foregoing
(defined in the Loan Agreement as the “Collateral”), as security for Borrower’s
obligations and indebtedness under the Loan Agreement and the other Loan
Documents (the “Obligations”).
 
This agreement for peaceful re-possession and foreclosure is entered into with
respect to the Loan Agreement, under which Borrower is presently in default.  In
the course of discussions among Borrower and Lenders over the past several
months, Borrower has indicated that it has made extensive efforts, without
success, to find an acquirer for Borrower or its assets and to raise additional
capital, and that Borrower’s existing investors are unwilling to provide any new
financing.  Due to the inability to obtain additional equity or debt financing,
Borrower has ceased operations.  Borrower does not have the ability to pay all
of its Obligations to Lenders under the Loan Agreement or to its trade
creditors.  Borrower’s Board of Directors has determined that there is not
likely to be any value for equity holders, and that it is in the best interest
of Borrower’s creditors to wind down operations and minimize further expenses.
 
In consideration of the foregoing, the parties hereto agree as follows:
 
1.           Borrower is now in default of its Obligations to Lenders, including
defaults under Sections 7.1(a) and 7.1(c) of the Loan Agreement, and as a result
of such defaults all Obligations of Borrower to each Lender are now due and
payable in full.  Without limiting the effect of prior notices of default and
acceleration to Borrower, each Lender hereby confirms and declares such Events
of Default exist, and accelerates all of the Obligations.

 

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2.           As of the date hereof, the aggregate outstanding amount of
Borrower’s Obligations to VLL4 is approximately $1,219,628.10, the aggregate
outstanding amount of Borrower’s Obligations to VLL5 is approximately
$1,219,628.10, and the aggregate outstanding amount of Borrower’s Obligations to
SVB is approximately $946,168.56.  Such amounts exclude any interest, costs,
expenses, and professional fees which may have been incurred or may hereafter
accrue.  Borrower and Lenders have reason to believe, based on Borrower’s having
engaged the services of an investment banker to find an acquirer for Borrower or
its assets, that the aggregate value realizable for the Collateral is
substantially less than the aggregate amount of the Obligations presently due
and owing to Lenders under the Loan Documents.
 
3.           Pursuant to the provisions of the Loan Documents and Division 9 of
the California Commercial Code (“CUCC”), Borrower shall immediately, following
demand from Agent or the Lenders, either make available or deliver to Agent and
Lenders, as secured parties: (i) custody and possession of all of the Collateral
whether located at 959 Hamilton Ave., Menlo Park, CA 94025 (the “Premises”) or
elsewhere, including receivables collections, cash on hand and on deposit in
banks, all securities (including share certificates for each subsidiary of
Borrower, if any), and all equipment, software, source code and related
documentation; and (ii) all books and records pertaining to the Collateral of
all types, wherever located, including any computer records (including passwords
and source codes) and books concerning accounts receivable, for the purpose of
collecting and holding the same, preparing the Collateral for collection, sale
or other disposition, and conducting such sale or disposition, provided that
Borrower, upon reasonable notice and for a proper purpose, shall have access to,
and the ability to make copies of, such records and books.
 
4.           Borrower hereby authorizes Agent and each Lender, directly or
through their agents, to obtain possession of all inventory, goods, fixtures,
equipment and other Collateral for the purposes of: (a) taking custody and
possession of the Collateral; (b) operating and using the Collateral to finish
work in progress, and to convert raw materials to finished goods; (c) operating
the Collateral for the purpose of maintaining and preserving its value and
physical condition; and (d) preparing the Collateral for sale or other
disposition, and conducting such sale or other disposition pursuant to such
Lender’s rights under the Loan Agreement and applicable law. In furtherance of
the foregoing, Borrower authorizes Agent and each Lender, directly or through
their agents, to enter into and use any business premises, subject to the terms
of any lease therefor, but without any payment to Borrower for use and
occupancy.  Agent and Lenders may contact the landlord/agent/operator for the
Premises or any other location at which the Collateral is located in order to
work with such person to secure the Collateral.
 
5.           Borrower authorizes Agent and Lenders (but only to the extent that
Borrower has the right to do so), in their sole discretion, to change the locks
on any business premises, to inform any security or burglar alarm system agency
of its right to use the Premises, to post a guard on the Premises, to arrange
for such fire and other insurance coverages as any one of them deems
appropriate, to remove the Collateral from any premises, to move the Collateral
to a safe location, to do such other acts as they reasonably deems necessary to
protect the Collateral from damage or waste, and to secure their possession and
custody thereof, all as reasonable expenses of retaking and preparing the
Collateral for sale or disposition.

 
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6.           Borrower acknowledges that, except as otherwise expressly agreed
herein, Agent and Lenders have no other duty with respect to custody and care of
the Collateral other than their duty under applicable law to use reasonable care
in the custody and preservation of the same, and that Agent and each Lender has
no responsibility for any tangible Collateral until physical possession thereof
has been taken.  Agent and Lenders shall have no obligation to maintain or
preserve the rights of Borrower in the Collateral against the claims of third
parties.
 
7.           Borrower hereby acknowledges that Agent and each Lender has not
made any commitment with respect to its method of disposing of the Collateral
other than their obligations under California law to do so in a commercially
reasonable manner to the extent required under the CUCC.  Borrower hereby waives
its rights to notice of any private sale under Section 9611 of the CUCC, and
waives its right to redeem the Collateral under Section 9623 of the
CUCC.  Notwithstanding any other provision of the Loan Documents with respect to
notice, Borrower hereby waives any further notice of sale or other disposition
to the extent permitted under applicable law, and agrees that Agent and Lenders
shall not be required to give Borrower notice of any proposed sale, lease,
election to retain, or other disposition of the Collateral.
 
8.           This agreement shall in no way impair or limit any rights or
remedies which Agent and Lenders may have under the Loan Documents or applicable
law, all of which are cumulative and not alternative, including, without
limitation, rights and remedies which they may have against the
Collateral.  Agent and each Lender hereby reserves all of its rights described
in the preceding sentence.  Nothing in this agreement shall limit Agent’s and
each Lender’s rights to take possession of, or any of Agent’s and such Lender’s
other rights with respect to, the Collateral, including Collateral covered by
any financing statement filed pursuant to the CUCC or the Uniform Commercial
Code adopted in any jurisdiction.  Agent, Lenders and Borrower agree that all
cash from collections and realizations upon Collateral shall be applied to
payment and satisfaction of the Obligations in the manner prescribed in the Loan
Agreement and by applicable law, and that if and to the extent Lenders receive
upon sale or other disposition of the Collateral any noncash consideration, such
as promissory notes or illiquid securities of a purchaser, it shall not be
commercially unreasonable for Lenders to hold such noncash consideration until
the same can be reduced to cash in a commercially reasonable manner, at which
time Lenders shall apply such proceeds to the remaining outstanding Obligations
and pay over the excess, if any, to Borrower or such other person(s) as may be
entitled thereto in accordance with applicable law.
 
9.           Borrower hereby agrees that, in consideration of the facts recited
herein, the forbearances previously provided to Borrower and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, in the event that:
 
(a)           Borrower (i) hereafter files with any bankruptcy court of
competent jurisdiction or becomes the subject of any petition under Title 11 of
the United States Code, as amended, (ii) becomes the subject of any order for
relief issued under such Title 11 of the United States Code, as amended,
(iii) files or becomes the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency or other relief for debtors, (iv) seeks or consents to or
acquiesces in the appointment of any trust, receiver or liquidater for itself or
for any substantial portion of its assets, (v) becomes the subject of any order,
judgment or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal or state act or law relating to bankruptcy, insolvency
or relief for debtors; and

 
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(b)           as a result of any of the matters set forth in (a) above, Agent’s
and Lenders’ ability to repossess and/or compete a private sale or sale at
foreclosure or other conveyance of the Collateral or to exercise or enforce any
of its or their rights or remedies under the Loan Documents at law or in equity
is interfered with, impeded or otherwise impaired because of a stay of such
repossession, sale or conveyance in such proceeding, then in any such event
Borrower agrees that Agent and Lenders have good cause for relief from any
automatic stay imposed by Section 362 of Title 11 of the United States Code, as
amended, or otherwise, on or against the exercise of the rights and remedies
otherwise available to Agent and Lenders as provided in the Loan Documents or as
otherwise provided by law, and in the event of the occurrence of any of the
events described in clauses (a)(i) through (a)(v) above, Borrower will not take
any action to impede, restrain or restrict Agent’s and Lenders’ rights and
remedies under this agreement or otherwise, whether under Sections 105 or 362 of
Title 11 of the United States Code or otherwise. In addition, Borrower waives
the right to extend the one hundred twenty (120) day period under which a debtor
has the exclusive right to file a plan of reorganization in any case involving
it as debtor under Title 11 of the United States Code.
 
10.           If at any time after the deemed payment or performance of the
Obligations, or any part thereof, is, pursuant to applicable law, avoided,
rescinded or reduced in amount, or must otherwise be restored or returned by any
Lender, whether as a “voidable preference,” “fraudulent conveyance,” or
otherwise then Borrower’s Obligations under the Loan Agreement shall be
reinstated and revived, all as though such acceptance, foreclosure, payment or
performance had not been made.
 
11.           In consideration of the forbearances previously provided to
Borrower, Borrower hereby, for itself, its affiliates, partners, agents,
successors, administrators and assigns, releases, acquits and forever discharges
Agent and each such Lender, their past or present directors, managers, officers,
employees, agents, affiliates, attorneys, shareholders, successors and assigns
(“Released Parties”), and each of them, separately and collectively, of and from
any and all claims, actions, causes of action, counterclaims, liabilities,
suits, debts, offsets, setoffs, losses, liens, demands, rights, obligations,
defenses, damages, costs, attorneys’ fees, interest, loss of service, expenses
and compensation, known or unknown, fixed or contingent, and defenses of every
nature and kind whatsoever existing as of the date hereof (“Claims”), which
Borrower might have had in the past, or now has, including, without limitation,
any Claims relating to and in any way connected with: the Loan Agreement, the
Loan Documents, the related agreements thereto, and the lending relationship
between Borrower and the Released Parties as of the date hereof, but excluding
any claims relating to Agent’s or such Lender’s breach of this agreement or
claims arising after the date of this agreement.
 
Furthermore, Borrower further agrees never to commence, aid or participate in,
either directly or indirectly (except to the extent required by order or legal
process issued by a court or governmental agency of competent jurisdiction) any
legal action, defense or other proceeding based in whole or in part on the
Claims being waived hereunder.

 
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Borrower expressly understands and acknowledges that it is possible that unknown
losses or Claims exist or that present losses or Claims may have been
understated in amount or severity, and it explicitly took that into account in
determining the consideration to be given for this release, and a portion of
said consideration and the mutual covenants contained herein, having been
bargained for between the parties with the knowledge of the possibility of such
unknown Claims, were given in exchange for a full accord, satisfaction and
discharge of all such Claims. Consequently, in furtherance of this general
release, Borrower acknowledges and waives the benefits of California Civil Code
section 1542 (and all similar ordinances and statutory, regulatory, or
judicially created laws or rules of any jurisdiction) which provides:
 
A GENERAL RELEASE DOES NOT EXTEND TO ANY CLAIM WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXISTS IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
 
Borrower agrees that the agreements contained herein are intended to be in full
satisfaction of any alleged injuries or damages of Borrower.  Borrower has
consulted with legal counsel prior to signing this release or has had an
opportunity to obtain such counsel and knowingly chose not to do so, and execute
such release voluntarily with the intention of fully and finally extinguishing
all disputes between the parties hereto.
 
Borrower acknowledges that it is relying on no written or oral agreement,
representation or understanding of any kind made by Agent and Lenders or any
employee, attorney or agent of Agent or Lenders.
 
12.           Borrower hereby represents and warrants to Agent and the Lenders
that: Borrower has full corporate power and authority to execute and deliver
this agreement, and to perform the obligations of its part to be performed
hereunder; Borrower has taken all necessary action, corporate or otherwise, to
authorize the execution and delivery of this agreement; no consent, approval or
authorization of any person or entity (other than any of the foregoing as has
been obtained by Borrower) is or will be required in connection with the
execution or delivery by Borrower of this agreement; and this agreement is, or
upon delivery hereof to Lenders will be, the legal, valid and binding obligation
of Borrower, enforceable against Borrower in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally.  Each of Agent and
Lenders hereby represents and warrants to Borrower that: it has full corporate
power and authority to execute and deliver this agreement, and to perform the
obligations of its part to be performed hereunder; it has taken all necessary
action, corporate or otherwise, to authorize the execution and delivery of this
agreement; no consent, approval or authorization of any person or entity (other
than any of the foregoing as has been obtained by it) is or will be required in
connection with the execution or delivery by it of this agreement; and this
agreement is, or upon delivery hereof to Borrower will be, its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally.

 
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13.           This agreement contains the entire agreement between the parties
relating to the subject matter hereof and supersedes all oral statements and
prior writings with respect thereto.  This agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Any party may execute
this agreement by facsimile signature or scanned signature in PDF format, and
any such facsimile signature or scanned signature, if identified, legible and
complete, shall be deemed an original signature and each of the parties is
hereby authorized to rely thereon.  This agreement shall be governed by the laws
of the State of California, excluding those laws that direct the application of
the laws of another jurisdiction.
 
remainder of this page intentionally left blank; signature page follows

 
-6-

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If you agree to the terms of this agreement, please indicate your agreement by
signing and returning the enclosed copy of this letter.

 
Very truly yours,
     
VENTURE LENDING & LEASING IV, INC.
     
By:
/s/
 
Name: Maurice Werdegar
 
Title: President
     
VENTURE LENDING & LEASING V, INC.
     
By:
/s/
 
Name: Maurice Werdegar
 
Title: President
     
SILICON VALLEY BANK
     
By:
   
Name:
 
Title:

 
ACKNOWLEDGED AND AGREED:
 
BIOABSORBABLE THERAPEUTICS, INC.
 
By:
   
Name:
   
Title:
   

 
 

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

 
 
If you agree to the terms of this agreement, please indicate your agreement by
signing and returning the enclosed copy of this letter.

 
Very truly yours,
     
VENTURE LENDING & LEASING IV, INC.
     
By:
   
Name:
 
Title:
     
VENTURE LENDING & LEASING V, INC.
     
By:
   
Name:
 
Title:
     
SILICON VALLEY BANK
     
By:
/s/
 
Name:Bellet Elirsnia
 
Title: Advisor III

 
ACKNOWLEDGED AND AGREED:
 
BIOABSORBABLE THERAPEUTICS, INC.
 
By:
   
Name:
   
Title:
   

 

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

 
 
If you agree to the terms of this agreement, please indicate your agreement by
signing and returning the enclosed copy of this letter.

 
Very truly yours,
     
VENTURE LENDING & LEASING IV, INC.
     
By:
   
Name:
 
Title:
     
VENTURE LENDING & LEASING V, INC.
     
By:
   
Name:
 
Title:
     
SILICON VALLEY BANK
     
By:
   
Name:
 
Title:

 
ACKNOWLEDGED AND AGREED:
 
BIOABSORBABLE THERAPEUTICS, INC.
 
By:
/s/
 
Name:
Patrick Rivelli
 
Title:
President and CEO
 

 
 

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

 
 
EXHIBIT “B”
 
TRANSFERRED ASSETS
 
The term “Transferred Assets” is defined on Exhibit A to the Bill of Sale
attached as Exhibit “C” to this Agreement.

 

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

 
 
Bioabsorbable Therapeutics, Inc.

Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
       
589318001/00
 
European Patent Convention
 
PCT
 
Published
 
7753611.8
 
20-Mar-2007
 
IMPROVED POLYANHYDRIDE POLYMERS AND THEIR USES IN BIOMEDICAL DEVICES
 
This application is based on PCT/US2007/007001 filed 03/20/2007 which is based
on USSN 11/389,434 filed 03/23/2006.
07/23/09- CPA’s confirmation of payment/renewal certificate [5/28/09]
 
Varshney, Sunil K.; Hnojewyj, Olexander; Zhang, Jianxin; Rivelli, Patrick A.
                                           
Action Due
 
DueDate
                                   
Annuity Due
 
20-Mar-2010
589318001/00
 
Patent Cooperation Treaty
 
ORD
 
National
 
PCT/US2007/007001
 
20-Mar-2007
 
IMPROVED POLYANHYDRIDE POLYMERS AND THEIR USES IN BIOMEDICAL DEVICES
 
EPO Allotted Application No. 07753611.8 This application is based on USSN
11/389,434 filed 03/23/2006.
 
Varshney, Sunil K.; Hnojewyj, Olexander; Zhang, Jianxin; Rivelli, Patrick A.
       
589318001/
 
United States of America
 
ORD
 
Abandoned
 
11/389,434
 
23-Mar-2006
 
IMPROVED POLYANHYDRIDE POLYMERS AND THEIR USES IN BIOMEDICAL DEVICES
 
Allow to lapse in favor of CON 12/484,102 filed 06/12/2009 - 06/16/2009.
 
Varshney, Sunil K.; Hnojewyj, Olexander; Zhang, Jianxin; Rivelli, Patrick A.
       
Assignment Date: June 19, 2006        Reel/Frame: 017819/0451
   
589318001/00
 
United States of America
 
CON
 
Pending
 
12/484,102
 
12-Jun-2009
 
IMPROVED POLYANHYDRIDE POLYMERS AND THEIR USES IN BIOMEDICAL DEVICES
 
The US examiner has indicated the claims have been allowed.
This application is a CON of USSN 11/389,434 filed 03/23/2006.
 
Varshney, Sunil K.; Hnojewyj, Olexander; Zhang, Jianxin; Rivelli, Patrick A.
       
589318002/00
  
Patent Cooperation Treaty
  
ORD
  
Expired
  
PCT/US2007/015811
  
10-Jul-2007
  
DRUG DELIVERY POLYANHYDRIDE COMPOSITION AND METHOD
  
Rec’d client instructions to wait for the 31- Months (Feb. 14, 2009) for further
instruction - 01/12/2009.
This application is based on USSN 11/486,501 filed 07/14/2006.
  
Hnojewyj, Olexander; Rivelli Jr., Patrick; Shaffer, Tony B.
  
 
  
 

 
Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
       
589318002/
 
United States of America
 
ORD
 
Published
 
11/486,501
 
14-Jul-2006
 
DRUG DELIVERY POLYANHYDRIDE COMPOSITION AND METHOD
     
Hnojewyj, Olexander; Rivelli Jr., Patrick; Shaffer, Tony B.
                                           
ActionDue
 
DueDate 23-Sep-2009 23-Oct-2009 23-Nov-2009
                                   
File Response [PTA]
                                     
File Response (1st ext) [PTA]
                                     
File Response (2nd ext) [PTA]
                                     
File Resp (2-wk adv to Final)
 
09-Dec-2009
                                   
File Response [PTA] LD
 
23-Dec-2009
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
File Pet. to Revive (1-mo adv)
  
23-Aug-2010

 
 

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

 
 
Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
                                           
File Petition to Revive
 
23-Sep-2010
Assignment Date: July 14, 2006          Reel/Frame: 018112/0074
         
589318003/00
 
Canada
 
PCT
 
Pending
 
2667325
 
23-Oct-2007
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
 
This application is based on PCT/US2007/022540 filed 10/23/2007 which is based
on USSN 60/853,847 filed 10/23/2006.
 
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
                                           
ActionDue
 
DueDate 23-Oct-2009 23-Oct-2012
                                   
Annuity Due
                                     
Request Exam. (Deadline)
 
589318003/00
 
European Patent Convention
 
PCT
 
Published
 
7867274.8
 
23-Oct-2007
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
 
This application is based on PCT/US2007/022540 filed 10/23/2007 which is based
on USSN 60/853,847 filed 10/23/2006.
 
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
                                           
ActionDue
 
DueDate 23-Oct-2009 15-Jan-2010
                                   
Annuity Due
                                     
Record in Hong Kong Deadline
 
589318003/00
 
Japan
 
PCT
 
Pending
 
2009534632
 
23-Oct-2007
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
 
Bioabsorbable ID No. 509114767
This application is based on PCT/US2007/022540 filed 10/23/2007 which is based
on USSN 60/853,847 filed 10/23/2006.
 
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
                                           
ActionDue
 
DueDate
                                   
Deferred Exam
 
23-Oct-2010
                                   
Request Exam. Deadline
 
23-Oct-2010
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Request Exam. (Deadline)
  
23-Oct-2014

Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
       
589318003/00
 
Patent Cooperation Treaty
 
ORD
 
National
 
PCT/US2007/022540
 
23-Oct-2007
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
 
Rec’d client instructions to file in CA, EP, JP and US - 04/10/2009.
This application is based on USSN 60/853,847 filed 10/23/2006.
 
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
       
589318003/
 
United States of America
 
PRO
 
Expired
 
60/853,847
 
23-Oct-2006
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
     
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
       
Assignment: September 21, 2007        Reel/Frame: 019861/0916
       
589318003/00
 
United States of America
 
PCT
 
Pending
 
12/446,498
 
21-Apr-2009
 
A DRUG-RELEASE COMPOSITION HAVING A THERAPEUTIC CARRIER
 
This application is based on PCT/US2007/022540 filed 10/23/2007 which is based
on USSN 60/853,847 filed 10/23/2006.
 
Hnojewyj, Olexander; Rivelli, Patrick A.; Shaffer, Tony B.; Cheung, David
       
589318005/  00
  
Patent Cooperation Treaty
  
ORD
  
Published
  
PCT/US2009/000187
  
12-Jan-2009
  
BRAIDED, BIODEGRADABLE STENTS AND METHODS
  
This application is based on USSN 61/020,636 filed 01/11/2008.
  
Hnojewyj, Olexander; Rivelli Jr., Patrick; Ophir, Zohar; Jaffe, Michael;
Shaffer, Tony B.; Leopold, Phillip M.; Leopold, Andrew R.; Cheung, David
  
 
  
 

 

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

 
Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
                                           
ActionDue
 
DueDate 11-Sep-2009 11-Oct-2009
                                   
Chapter I Due(Nat’l Filing)
                                     
1st Opinion from PCT
                                     
Article 34 Amendments Due
 
11-Nov-2009
                                   
Chapter II/Exam Fee Due Rule54
 
11-Nov-2009
                                   
2nd Opinion from PCT
 
11-Dec-2009
                                   
Final Response to Opinions
 
11-Feb-2010
                                   
Examination Report from PCT
 
11-May-2010
                                   
Chapter I Due (Extended)
 
11-Jul-2010
                                   
Chapter II Due (Nat’l Filing)
 
11-Jul-2010
                                   
Chapter II 31st Month Deadline
 
11-Aug-2010
589318005/
 
United States of America
 
PRO
 
Form Filed
 
61/020,636
 
11-Jan-2008
 
BRAIDED, BIODEGRADABLE STENTS AND METHODS
 
Rec’d client instructions to filed a U.S. Utility and a PCT application choosing
the EPO as the ISA - 11/25/2008.
 
Hnojewyj, Olexander; Rivelli Jr., Patrick; Ophir, Zohar; Jaffe, Michael;
Shaffer, Tony B.; Leopold, Phillip M.; Leopold, Andrew R.; Cheung, David
                                                 
Matter Number
 
Country
 
Case
Type
 
Status
 
Application No.
 
Filing Date
 
Title
 
Remarks
 
Inventors
       
589318005/00
 
United States of America
 
PRO
 
Pending
 
61/143,883
 
12-Jan-2009
 
BRAIDED, BIODEGRADABLE STENTS AND METHODS
     
Hnojewyj, Olexander; Rivelli Jr., Patrick; Ophir, Zohar; Jaffe, Michael;
Shaffer, Tony B.; Leopold, Phillip M.; Leopold, Andrew R.; Cheung, David
                                           
ActionDue
 
DueDate
                                   
Corrected App. Due from Client
 
12-Dec-2009
                                                                             
US Filing Deadline
 
12-Jan-2010
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Foreign Filing Deadline
  
12-Jan-2010

 
 

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ADDITIONAL TRANSFERRED ASSETS
 
All Manufacturing Records including but not limited to SOPs, Subassembly, Raw
Material and Finished Product manufacturing records, and all QA/QC, Product
Packaging Procedures.
 
All Laboratory Notebooks, Formulation Procedures, and Product Designs.
 
All Animal and Human Clinical Trial Data, Regulatory Agency Submissions, and
Adverse Event Records.
 
All Vendor Lists, Inventory Records, Parts Lists.
 
The Computer Server of Bioabsorbable Therapeutics, Inc.
 
All other property whether intangible or tangible that may be in the possession
of Sellers.
 

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[pg39.jpg]
 
 

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EXHIBIT “C”
 
BILL OF SALE
 
Pursuant to § 9610 of the California Commercial Code, and in exchange for the
consideration provided under Section 4 of the FS Agreement (as defied below),
Venture Lending & Leasing IV, Inc., Venture Lending & Leasing V, Inc. and
Silicon Valley Bank (collectively “Sellers”) do hereby sell, transfer and
deliver to Xenogenics Corporation, a Nevada corporation (hereinafter
“Purchaser”), all of the rights of Bioabsorbable Therapeutics, Inc., a Delaware
corporation (“Debtor”), to certain of the assets of Debtor, which are more
particularly described in Exhibit “A” attached to this Bill of Sale. Said assets
shall hereinafter be referred to as the “Transferred Assets.”
 
The sale transfers to Purchaser all of Debtor’s right, title and interest in and
to the Transferred Assets free and clear of any and all security interests of
Sellers and any security interest or lien subordinate thereto.
 
EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES OF SELLERS EXPRESSLY SET FORTH
IN THAT CERTAIN FORECLOSURE SALE AGREEMENT AMONG SELLERS AND PURCHASER DATED
SEPTEMBER __, 2010 (“FS AGREEMENT”), THE TRANSFERRED ASSETS ARE TRANSFERRED
WITHOUT ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTIES AS TO TITLE, POSSESSION, QUIET
ENJOYMENT, MERCHANTABILITY, VALUE, USEFUL LIFE, FITNESS FOR INTENDED USE,
PHYSICAL CONDITION, NON-INFRINGEMENT OR SIMILAR REPRESENTATIONS AND WARRANTIES
FROM, OR ON BEHALF OF, SELLERS. PURCHASER HEREBY AGREES THAT THE TRANSFERRED
ASSETS ARE BEING PLACED AT PURCHASER’S DISPOSAL IN “AS IS” AND “WHERE IS”
CONDITION.
 
Except as provided in the FS Agreement, Purchaser acknowledges that it has not
relied upon any representations of Sellers, except as may specifically be
provided herein, and that it has examined the validity, quantity, quality and
value of the Transferred Assets and has accepted the same without recourse to
Sellers and Sellers disclaim any representation or warranty that particular
property described on Exhibit “A” exists, in whole or in part, or is in a form
usable to Purchaser.
 
IN NO EVENT WILL ANY PARTY BE LIABLE TO ANY OTHER PARTY, OR ANY CUSTOMER OF
PURCHASER OR OTHERS FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL,
EXEMPLARY OR SIMILAR DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF DATA,
GOODWILL, REVENUE, PROFITS, LATENT DEFECTS, LOSS OF CAPITAL, CLAIMS FOR SERVICE
INTERRUPTION, COSTS AND EXPENSES INCURRED IN THE REMOVAL OF TRANSFERRED ASSETS),
ARISING OUT OF OR IN CONNECTION WITH BUYER’S OR THEIR CUSTOMERS’ OR ANY OTHER
PARTY’S USE, MAINTENANCE OR OPERATION OF ANY OF THE TRANSFERRED ASSETS,
IRRESPECTIVE OF THE CAUSE OF ACTION OR THEORY UPON WHICH LIABILITY FOR SUCH
DAMAGES MIGHT BE ALLEGED, INCLUDING BUT NOT LIMITED TO, INFRINGEMENT,
MISAPPROPRIATION, NEGLIGENCE, OR OTHER TORT, BREACH OF CONTRACT OR WARRANTY
(EXPRESS OR IMPLIED), STRICT LIABILITY OR OTHERWISE, WHETHER AT LAW, IN EQUITY
OR OTHERWISE, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
CLAIM FOR DAMAGES.
 
As between Sellers and Purchaser only, in addition to all the consideration paid
hereunder, Purchaser shall be liable for all sales, use, excise, stamp,
documentary, filing, recording, transfer or similar fees or taxes and shall hold
Sellers harmless from any cost relating thereto.

 

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

 
 
All aspects of this agreement, including construction, validity and performance
of this agreement, shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.  The Purchaser agrees to
submit to the exclusive jurisdiction of the state and Federal courts located in
County of Santa Clara, State of California.
 
[Signatures on the Following Page]

 

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

 
 
Executed at San Jose, California and Woonsocket, Rhode Island this __ day of
September, 2010.
 
“Sellers”
 
VENTURE LENDING & LEASING IV, INC.
 
By:
 
Name:
 
Its:
   
VENTURE LENDING & LEASING V, INC., as Agent and as a Seller
 
By:
 
Name:
 
Its:
   
SILICON VALLEY BANK
 
By:
 
Name:
 
Its:
 

 
THE FOREGOING IS AGREED AND ACCEPTED:

XENOGENICS CORPORATION
 
By:
 
Name: W. Gerald Newmin
Its: Chairman & CEO

 
 

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Exhibit “A”
To
Bill of Sale
 
The term “Transferred Assets” means all right, title and interest of Debtor in
and to the following items of personal property in existence and owned by Debtor
as of the date of the Bill of Sale to which this Exhibit is attached: all of the
tangible and intangible assets of Debtor that were used in or related to
Debtor’s business of researching, developing and producing bioabsorbale stents
(the “Business”), including, without limitation, all of Debtor’s right, title
and interest in and to the following property that were used in or related to
the Business: (a) all Equipment; (b) all General Intangibles; (c) all Inventory;
(d) all other Goods and personal property of Debtor, whether tangible or
intangible, now owned or existing, leased, consigned by or to, Debtor and
wherever located; (e) all Records; and (f) all Proceeds of each of the foregoing
and all accessions to, substitutions and replacements for, and rents, profits
and products of each of the foregoing.
 
Capitalized terms used in this Exhibit “A” are defined as follows:
 
“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration in existence and owned by Debtor as of the
date of the Bill of Sale to which this Exhibit is attached.
 
“Copyrights” means all of the following in existence and owned by Debtor as of
the date of the Bill of Sale to which this Exhibit is attached: (i) all
copyrights, whether registered or unregistered, held pursuant to the laws of the
United States, any State thereof or of any other country; (ii) all
registrations, applications and recordings in the United States Copyright Office
or in any similar office or agency of the United States, any State thereof or
any other country; (iii) all continuations, renewals or extensions thereof; and
(iv) any registrations to be issued under any pending applications.
 
“Equipment” means any “equipment,” as such term is defined in the UCC, in
existence and owned by Debtor as of the date of the Bill of Sale to which this
Exhibit is attached (including the items listed on Schedule 1 to this Exhibit),
and any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
 
“General Intangibles” means any “general intangibles,” as such term is defined
in the UCC, in existence and owned by Debtor as of the date of the Bill of Sale
to which this Exhibit is attached and, in any event, shall include, without
limitation, all right, title and interest that Debtor may now have in or under
any contract, all customer lists, Copyrights, Trademarks, Patents, websites,
domain names, and all applications therefor and reissues, extensions, or
renewals thereof, other rights to Intellectual Property, interests in
partnerships, joint ventures and other business associations, Licenses, permits,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, recipes,
experience, processes, models, drawings, materials and records, goodwill
(including, without limitation, the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License),
claims in or under insurance policies, including unearned premiums, rights to
sue for past, present and future infringement of Copyrights, Trademarks and
Patents, rights of indemnification.
 
“Goods” means any “goods,” as such term is defined in the UCC, in existence and
owned by Debtor as of the date of the Bill of Sale to which this Exhibit is
attached.

 

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

 
 
“Inventory” means any “inventory,” as such term is defined in the UCC, wherever
located, in existence and owned by Debtor as of the date of the Bill of Sale to
which this Exhibit is attached, and, in any event, shall include, without
limitation, all inventory, goods and other personal property that are held by or
on behalf of Debtor for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process or
materials used or consumed or to be used or consumed in Debtor’s business, or
the processing, packaging, promotion, delivery or shipping of the same, and all
finished goods, whether or not the same is in transit or in the constructive,
actual or exclusive possession of Debtor or is held by others for Debtor’s
account, including, without limitation, all goods covered by purchase orders and
contracts with suppliers and all goods billed and held by suppliers and all such
property that may be in the possession or custody of any carriers, forwarding
agents, truckers, warehousemen, vendors, selling agents or other persons.
 
“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests in existence and owned by Debtor as of the
date of the Bill of Sale to which this Exhibit is attached, and any renewals or
extensions thereof.
 
“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence and owned by Debtor as of the
date of the Bill of Sale to which this Exhibit is attached.
 
“Patents” means all of the following property in existence and owned by Debtor
as of the date of the Bill of Sale to which this Exhibit is attached: (a) all
letters patent of, or rights corresponding thereto in, the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of, or rights corresponding thereto in, the United States or
any other country, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country;
(b) all reissues, continuations, continuations-in-part or extensions thereof;
(c) all petty patents, divisionals, and patents of addition; and (d) all patents
to be issued under any such applications.
 
“Records” means, to the extent related to or evidencing the Transferred Assets,
all Debtor’s computer programs, software, hardware, source codes and data
processing information, all written documents, books, invoices, ledger sheets,
financial information and statements, and all other writings concerning the
Business in existence and owned by Debtor as of the date of the Bill of Sale to
which this Exhibit is attached.
 
“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration in existence and owned by Debtor as of the
date of the Bill of Sale to which this Exhibit is attached.
 
“Trademarks” means all of the following property in existence and owned by
Debtor as of the date of the Bill of Sale to which this Exhibit is attached:
(a) all trademarks, tradenames, corporate names, business names, trade styles,
service marks, logos, other source or business identifiers, prints and labels on
which any of the foregoing have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and any applications in connection
therewith, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof and (b) reissues, extensions or renewals
thereof.
 
“UCC” means the Uniform Commercial Code as in effect in the State of California
as of the date of this Bill of Sale.  Unless otherwise defined herein, terms
that are defined in the UCC and used herein shall have the meanings given to
them in the UCC.
 
 

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

 
 
Executed at San Jose, California and Woonsocket, Rhode Island this __ day of
September, 2010.
 

“Sellers”
 
VENTURE LENDING & LEASING IV, INC.
 
By:
 
Name:
 
Its:
   
VENTURE LENDING & LEASING V, INC., as Agent and as a Seller
 
By:
 
Name:
 
Its:
   
SILICON VALLEY BANK
 
By:
 
Name:
 
Its:
 

 
THE FOREGOING IS AGREED AND ACCEPTED:

XENOGENICS CORPORATION
 
By:
 
Name: W. Gerald Newmin
Its: Chairman & CEO

 
 

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Schedule 1
 
[see attachment hereto]
 
 

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[pg47.jpg]
 

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[pg48a.jpg]
 
SECRETARY OF STATE
 
STATE OF CALIFORNIA
 
Search Certificate
 
SEARCH REQUESTED ON:
09/16/2010

 
Organization Debtor: BIOABSORBABLE THERAPEUTICS, INC.
 
Address: NOT SPECIFIED
 
Date Range From: NOT SPECIFIED
 
Search: ALL
 
The undersigned Filing Officer hereby certifies that there are no active
financing statements, tax liens, attachment liens, or judgement liens on file in
my office reflecting the above Debtor as of 09/07/2010 at 1700 hours.
 
The search results herein reflect only the specific information requested. The
results of this Debtor search will not reflect variances of this name. If the
Debtor is known under other personal names, trade names, business entities, or
addresses, separate searches of these names will have to be requested and
conducted. The Secretary of State, his officers and agents disclaim any and all
liability for claims resulting from other filings on which the name of the
Debtor can be found in any other form than which was requested.
 
[pg48b.jpg]
Debra Bowen
Secretary of State
 
 

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EXHIBIT “D”
 
PATENT TRANSFER STATEMENT

 

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PATENT TRANSFER STATEMENT
(under Uniform Commercial Code Section 9-619)
 
WHEREAS, Bioabsorbable Therapeutics, Inc., a Delaware corporation (“BTI”), is
the registered owner of certain patents registered and patents applications
pending in the United States Patent and Trademark Office, (hereinafter
collectively referred to as the “Patents” and “Applications”), all of which are
set forth on the Schedule attached hereto;
 
WHEREAS, BTI previously granted to each of Venture Lending & Leasing IV, Inc.
(“VLL4”), Venture Lending & Leasing V, Inc. (“VLL5”) and Silicon Valley Bank
(“SVB” and sometimes being referred to herein together with VLL4 and VLL5 as
“Secured Parties” and individually as a “Secured Party”) security interests in
all of BTI’s right, title and interest in and to all general intangibles and
other personal property owned by BTI, including the Patents and Applications, as
security for certain loans which are in default;
 
WHEREAS, BTI has defaulted in connection with its secured obligations to Secured
Parties;
 
WHEREAS, each Secured Party has exercised its post-default rights of foreclosure
of its security interests in and to the Patents and Applications; and
 
WHEREAS, by reason of the exercise of such post-default remedies, all rights of
BTI in and to the Patents and Applications have been acquired by Xenogenics
Corporation, a Nevada corporation (“Transferee”).
 
NOW, THEREFORE, in accordance with Section 9619(b) of the California Commercial
Code, Transferee is entitled to a transfer of record of all rights of BTI in the
Patents and Applications, and request is hereby made that the Commissioner of
Patents and Trademarks and the United States Patent and Trademark Office accept
the foregoing transfer statement and promptly amend its records to reflect the
aforesaid transfer to Transferee.
 
The mailing address of BTI, Secured Parties and the Transferee are as follows:

BTI:
Bioabsorbable Therapeutics, Inc.
c/o Western Technology Investment
2010 North First Street, Suite 310
San Jose, CA 95131
Attention: Chief Financial Officer
   
Secured Parties:
Venture Lending & Leasing V, Inc., as Agent
2010 North First Street, Suite 310
San Jose, CA 95131
Attn: Chief Financial Officer
   
Transferee:
Xenogenics Corporation
68 Cumberland Street, Suite 301
Woonsocket, RI 02895
Tel.: (401) 762-0045
FAX: (401) 762-0098
Attention: W. Gerald Newmin,
Chairman & CEO

 
 
 

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This instrument may be executed in counterparts, and each counterpart shall have
the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.  This instrument may
be executed by facsimile signature, and such signature shall be treated as a
fully enforceable signature hereto.
 
[Signature pages follow]

 
 

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IN WITNESS WHEREOF, each Secured Party and Transferee has caused its name to be
signed by a duly authorized representative
this                                                      day
of                                      , 2010.
 
SECURED PARTIES:
 
VENTURE LENDING & LEASING IV, INC.
 
By:
 
Name:
Title:
 
VENTURE LENDING & LEASING V, INC.
 
By:
 
Name:
Title:
 
SILICON VALLEY BANK
 
By:
 
Name:
Title:
 
TRANSFEREE:
 
XENOGENICS CORPORATION
 
By:
 
Name: W. Gerald Newmin
Title: Chairman & CEO

 
 
 

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Schedule of Patents and Applications

Description
 
Registration/Serial Number
 
Registration/Application Date
         
IMPROVED
POLYANHYDRIDE
POLYMERS AND THEIR
USES IN BIOMEDICAL
DEVICES
 
PCT/US2007/007001
 
20-MAR-2007
         
IMPROVED
POLYANHYDRIDE
POLYMERS AND THEIR
USES IN BIOMEDICAL
DEVICES
 
11/389,434
 
23-MAR-2006
         
DRUG DELIVERY
POLYANHYDRIDE
COMPOSITION AND
METHOD
 
PCT/US2007/015811
 
10-JUL-2007
         
DRUG DELIVERY
POLYANHYDRIDE
COMPOSITION AND
METHOD
 
11/486,501
 
14-JUL-2006
         
A DRUG-RELEASE
COMPOSITION HAVING A
THERAPEUTIC CARRIER
 
PCT/US2007/022540
 
23-OCT-2007
         
BRAIDED,
BIODEGRADABLE STENTS
AND METHODS
  
61/020,636
  
11-JAN-2008

 
 
 

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EXHIBIT “E”
 
TRADEMARK TRANSFER STATEMENT

 
 

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TRADEMARK TRANSFER STATEMENT
(under Uniform Commercial Code Section 9-619)
 
WHEREAS, Bioabsorbable Therapeutics, Inc., a Delaware corporation (“BTI”), is
the registered owner of certain trademarks and service marks registered and
pending in the United States Patent and Trademark Office, pending foreign
trademark applications, and common law trademarks and service marks (hereinafter
collectively referred to as the “Marks”), all of which are set forth on the
Schedule attached hereto;
 
WHEREAS, BTI previously granted to each of Venture Lending & Leasing IV, Inc.
(“VLL4”), Venture Lending & Leasing V, Inc. (“VLL5”) and Silicon Valley Bank
(“SVB” and sometimes being referred to herein together with VLL4 and VLL5 as
“Secured Parties” and individually as a “Secured Party”)security interests in
all of BTI’s right, title and interest in and to all general intangibles and
other personal property owned by BTI, including the Marks as security for
certain loans which are in default;
 
WHEREAS, BTI has defaulted in connection with its secured obligations to
SecuredParties;
 
WHEREAS, each Secured Party has exercised its post-default rights of foreclosure
of its security interests in and to the Marks and the goodwill associated
therewith, and pursuant to a power of sale and foreclosure has conveyed on
[___________________], 2010, the Marks to Xenogenics Corporation, a Nevada
corporation (“Transferee”); and
 
WHEREAS, by reason of the exercise of such foreclosure remedies and conveyance,
all rights of BTI in and to the Marks have been acquired by Transferee.
 
NOW, THEREFORE, in accordance with Section 9619(b) of the California Commercial
Code, Transferee is entitled to a transfer of record of all rights of BTI in the
Marks, and request is hereby made that the Commissioner of Patents and
Trademarks and the United States Patent and Trademark Office accept the
foregoing transfer statement and promptly amend its records to reflect the
aforesaid transfer to Transferee.
 
The mailing address of BTI, Secured Parties and the Transferee are as follows:

BTI:
Bioabsorbable Therapeutics, Inc.
c/o Western Technology Investment
2010 North First Street, Suite 310
San Jose, CA 95131
Attention: Chief Financial Officer
   
Secured Parties:
Venture Lending & Leasing V, Inc., as Agent
2010 North First Street, Suite 310
San Jose, CA 95131
Attn: Chief Financial Officer
   
Transferee:
Xenogenics Corporation
68 Cumberland Street, Suite 301
Woonsocket, RI 02895
Tel.: (401) 762-0045
FAX: (401) 762-0098
Attention: W. Gerald Newmin,
Chairman & CEO

 
 

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This instrument may be executed in counterparts, and each counterpart shall have
the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.  This instrument may
be executed by facsimile signature, and such signature shall be treated as a
fully enforceable signature hereto.
 
[Signature pages follow]

 
 

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

 
 
IN WITNESS WHEREOF, each Secured Party and Transferee has caused its name to be
signed by a duly authorized representative
this                                             day
of                                      , 2010.

SECURED PARTIES:
 
VENTURE LENDING & LEASING IV, INC.
 
By:
 
Name:
Title:
 
VENTURE LENDING & LEASING V, INC.
   
By:
 
Name:
Title:
 
SILICON VALLEY BANK
 
By:
 
Name:
Title:
 
TRANSFEREE:
 
XENOGENICS CORPORATION
 
By:
 
Name: W. Gerald Newmin
Title: Chairman & CEO

 
 
 

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

 
 
Schedule of Trademarks

Description
 
Registration/Serial Number
 
Registration/Application Date
         
IDEAL
 
78/954,880
 
17-AUG-2006
         
IDEAL
  
New Zealand: (210) 776589
  
26-SEPT-2007

 
 
 

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EXHIBIT “F”
 
WIRE INSTRUCTIONS
 
FOR VENTURE LENDING & LEASING V, INC. Union Bank, N.A
 
ABA #: 122000496
 
Monterey Park, CA 91755 USA
 
For Credit to: Venture L&L V, Inc. Custody Account Number: 6711805001
 
Ref: TRUSDG/37130196431/Branch 263
 
Attn: Douglas Schlafer

 
 

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EXHIBIT “G”
 
FORM OF WARRANT

 
 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR, SUBJECT
TO SECTION 2(B) BELOW, AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION THEREFROM
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
Date of issuance: September __, 2010
 
Expiration Date: September __, 2020
 
WARRANT TO PURCHASE
 
SHARES OF COMMON STOCK OF
 
XENOGENICS CORPORATION
 
This certifies that VENTURE LENDING & LEASING IV, LLC, or assigns (the
“Holder”), for value received, is entitled to purchase from XENOGENICS
CORPORATION, a Nevada corporation (the “Company”), One Hundred Seventy-five
Thousand and Four (175,004) fully paid and nonassessable shares of the Company’s
Common Stock (“Common Stock”) for cash at a price of $0.038 per share (the
“Stock Purchase Price”) at any time or from time to time up to and including
5:00 p.m. (Pacific time) on September __, 2020 (the “Expiration Date”), upon
surrender to the Company at its principal office at 68 Cumberland Street, Suite
301, Woonsocket, Rhode Island 02895 (or at such other location as the Company
may advise Holder in writing), of this Warrant properly endorsed with the Form
of Subscription attached hereto, duly filled in and signed and upon payment in
cash or by check of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof. The Holder may also exercise this Warrant on a cashless or
“net issuance” basis as described in Section 1(b) below.
 
This Warrant is subject to the following terms and conditions:
 
1.           Exercise; Issuance of Certificates; Payment for Shares.
 
(a)           Unless an election is made pursuant to clause (b) of this
Section 1, this Warrant shall be exercisable at the option of the Holder, at any
time or from time to time, on or before the Expiration Date for all or any
portion of the shares of Common Stock (but not for a fraction of a share) which
may be purchased hereunder for the Stock Purchase Price multiplied by the number
of shares to be purchased.  The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which the form of subscription shall have been delivered and payment
made for such shares.  Subject to the provisions of Section 2, certificates for
the shares of Common Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company’s expense within a
reasonable time after the rights represented by this Warrant have been so
exercised.  Except as provided in clause (b) of this Section 1, in case of a
purchase of less than all the shares which may be purchased under this Warrant,
the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under this
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time.  Each stock certificate so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered in
the name of such Holder or such other name as shall be designated by such
Holder, subject to the limitations contained in Section 2.

 
 

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

 

 
(b)           The Holder, in lieu of exercising this Warrant by the cash payment
of the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect,
at any time on or before the Expiration Date, to surrender this Warrant and
receive that number of shares of Common Stock equal to the quotient of: (i) the
difference between (A) the Per Share Price (as hereinafter defined) of the
Common Stock, less (B) the Stock Purchase Price then in effect, multiplied by
the number of shares of Common Stock the Holder would otherwise have been
entitled to purchase hereunder pursuant to clause (a) of this Section 1 (or such
lesser number of shares as the Holder may designate in the case of a partial
exercise of this Warrant); over (ii) the Per Share Price.  Election to exercise
under this Section 1(b) may be made by delivering a signed form of subscription
to the Company via facsimile, to be followed by delivery of this
Warrant.  Notwithstanding anything to the contrary contained in this Warrant, if
as of the close of business on the last business day preceding the Expiration
Date this Warrant remains unexercised as to all or a portion of the shares of
Common Stock purchasable hereunder, then effective as 9:00 a.m. (Pacific time)
on the Expiration Date, the Holder shall be deemed, automatically and without
need for notice to the Company, to have elected to exercise this Warrant in full
pursuant to the provisions of this Section 1(b), and upon surrender of this
Warrant shall be entitled to receive that number of shares of Common Stock
computed using the above formula.
 
(c)           For purposes of clause (b) of this Section 1, “Per Share Price”
means the closing price of the Common Stock as quoted by NASDAQ or listed on any
exchange, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the trading day immediately prior to the date of the
Holder’s election hereunder.  If the Common Stock is not quoted by NASDAQ or
listed on an exchange and none of the above clauses apply, the Per Share Price
of the Common Stock shall be the price per share which the Company would obtain
from a willing buyer for shares sold by the Company from authorized but unissued
shares as such price shall be agreed upon by the Holder and the Company or, if
agreement cannot be reached within ten (10) business days of the Holder’s
election hereunder, as such price shall be determined in good faith by the
Company’s board of directors.
 
2.           Limitation on Transfer.
 
(a)           This Warrant and the Common Stock shall not be transferable except
upon the conditions specified in this Section 2, which conditions are intended
to ensure compliance with the provisions of the Securities Act.  Each holder of
this Warrant or the Common Stock issuable hereunder will cause any proposed
transferee of the Warrant or Common Stock to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 2.  Subject to the provisions of this Section 2 and upon providing
Company with written notice, the Holder may freely transfer all or part of this
Warrant or the shares issuable upon exercise of this Warrant (or the shares
issuable, directly or indirectly, upon conversion of the shares, if any) to any
transferee, provided, however, in connection with any such transfer, the Holder
will give Company notice of the portion of the Warrant being transferred setting
forth the name, address and taxpayer identification number of the transferee and
Holder will surrender this Warrant to Company for reissuance to the
transferee(s) (and Holder, if applicable).

 
 

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

 
 
(b)           The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer this Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
 
3.           Shares to be Fully Paid; Reservation of Shares.  The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock when and as required to provide for the exercise of the
rights represented by this Warrant.  The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.  The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as described in Section 4 hereof) (i) if
the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company’s Certificate of Incorporation, (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of the Company’s preferred stock together with all shares of
Common Stock then outstanding and then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding would exceed
the total number of shares of Common Stock then authorized by the Company’s
Certificate of Incorporation or (iii) if the par value per share of the Common
Stock would exceed the Stock Purchase Price.
 
4.           Adjustment of Stock Purchase Price Number of Shares.  The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4.  Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
 
4.1           Subdivision or Combination of Stock.  In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

 
 

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4.2         Dividends in Common Stock, Other Stock, Property,
Reclassification.  If at any time or from time to time the holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
 
(a)           Common Stock, or any shares of stock or other securities whether
or not such securities are at any time directly or indirectly convertible into
or exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution, or
 
(b)           any cash paid or payable otherwise than as a cash dividend, or
 
(c)           Common Stock or other or additional stock or other securities or
property (including cash) by way of spin off, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split, adjustments in respect of which shall be
covered by the terms of Section 4.1 above), then and in each such case, the
Holder hereof shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock
and other securities and property (including cash in the cases referred to in
clauses (b) and (c) above) which such Holder would hold on the date of such
exercise had it been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
and/or all other additional stock and other securities and property.
 
4.3         Change of Control; IPO.  In the event of (i) a Change of Control (as
hereinafter defined) or (ii) the consummation of a sale of the Company’s
securities pursuant to a registration statement filed by Company under the
Securities Act (or pursuant to the laws of the jurisdiction in which the initial
public offering is completed), in connection with the first firm commitment
underwritten offering of the Company’s securities to the general public that
occurs after the date this Warrant is issued (“IPO”), this Warrant shall be
automatically exchanged for a number of shares of the Company’s securities, such
number of shares being equal to the maximum number of shares issuable pursuant
to the terms hereof (after taking into account all adjustments described herein)
had the Holder elected to exercise this Warrant immediately prior to the closing
of such Change of Control or IPO and purchased all such shares pursuant to the
cash exercise provision set forth in Section 1(a) hereof (as opposed to the
cashless exercise provision set forth in Section 1(b)). The Company acknowledges
and agrees that the Holder shall not be required to make any additional payment
(cash or otherwise) for such shares as further consideration for their issuance
pursuant to the terms of the preceding sentence.  “Change of Control” shall mean
any sale, license, or other disposition of all or substantially all of the
assets of the Company, any reorganization, consolidation, merger or other
transaction involving the Company where the holders of the Company’s securities
before the transaction beneficially own less than 50% of the outstanding voting
securities of the surviving entity after the transaction.  This Warrant shall
terminate upon the Holder’s receipt of the number of shares of the Company’s
equity securities described in this Section 4.3.
 
4.4         Notice of Adjustment.  Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice, which may be substantially in the form of Exhibit “A” attached hereto,
shall be signed by the Company’s chief financial officer and shall state the
Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

 
 

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

 
 
4.5         Other Notices.  If at any time:
 
(a)           the Company shall declare any cash dividend upon its Common Stock;
 
(b)           the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
 
(c)           there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another entity;
 
(d)           there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
 
(e)           the Company shall take or propose to take any other action, notice
of which is actually provided to holders of the Common Stock;
 
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (i) at least 20 day’s prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend or distribution or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action, at least 20 day’s written notice of the date when the same shall take
place. Any notice given in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend or distribution, the date on which the
holders of Common Stock shall be entitled thereto.  Any notice given in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action as the case may be.
 
4.6         Certain Events.  If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not fairly
effect the adjustments to this Warrant in accordance with the essential intent
and principles of such provisions, then the Board of Directors of the Company
shall make in good faith an adjustment in the number and class of shares
issuable under this Warrant, the Stock Purchase Price and/or the application of
such provisions, in accordance with such essential intent and principles, so as
to protect such purchase rights as aforesaid.  The adjustment shall be such as
will give the Holder of this Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as the Holder would
have owned had this Warrant been exercised prior to the event and had the Holder
continued to hold such shares until after the event requiring adjustment.
 
5.          Issue Tax.  The issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder of
this Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of this Warrant being exercised.

 
 

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6.           Closing of Books.  The Company will at no time close its transfer
books against the transfer of this Warrant or of any shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
 
7.           No Voting or Dividend Rights; Limitation of Liability.  Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a stockholder in respect of meetings
of stockholders for the election of directors of the Company or any other
matters or any rights whatsoever as a stockholder of the Company.  No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised.  No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by its creditors.
 
8.           Amendment of Certificate of Incorporation.  Unless the holder of
this Warrant consents thereto in writing, the Company shall not amend its
Certificate of Incorporation prior to the exercise of this Warrant if the effect
of such amendment on the Holder hereof would be more adverse to the Holder
hereof than, and substantially dissimilar to, its effect on the other holders of
the Company’s Common Stock.
 
9.           Registration Rights.  The Holder hereof shall be entitled, with
respect to the shares of Common Stock issued upon exercise hereof to all of the
registration rights set forth in any agreement entered into after the date of
issuance of this Warrant among the Company and its investors whereby such
investors are provided registration rights (as applicable, the “Rights
Agreement”) to the same extent and on the same terms and conditions as possessed
by the investors thereunder with the following exceptions and clarifications:
(i) the Holder will be subject to the same provisions regarding indemnification
as contained in the Rights Agreement; and (ii) the registration rights are
freely assignable by the Holder of this Warrant in connection with a permitted
transfer of this Warrant or the shares issuable upon exercise hereof. The
Company shall take such action as may be reasonably necessary to assure that the
granting of such registration rights to the Holder does not violate the
provisions of the Rights Agreement or any of the Company’s charter documents or
rights of prior grantees of registration rights.
 
10.           Rights and Obligations Survive Exercise of Warrant.  The rights
and obligations of the Company, of the Holder of this Warrant and of the holder
of shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
 
11.           Modification and Waiver.  This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
 
12.           Notices.  Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
deemed to have been given (i) upon receipt if delivered personally or by courier
(ii) upon confirmation of receipt if by telecopy or (iii) three business days
after deposit in the US mail, with postage prepaid and certified or registered,
to each such Holder at its address as shown on the books of the Company or to
the Company at the address indicated therefor in the first paragraph of this
Warrant.

 
 

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13.          Binding Effect on Successors.  This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company’s assets.  All of the obligations of
the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant.  All of the
covenants and agreements of Company shall inure to the benefit of the successors
and assigns of Holder hereof.  Company will, at the time of the exercise of this
Warrant, in whole or in part, upon request of Holder hereof but at Company’s
expense, acknowledge in writing its continuing obligation to Holder hereof in
respect of any rights (including, without limitation, any right to registration
of the shares of Common Stock) to which Holder hereof shall continue to be
entitled after such exercise in accordance with this Warrant; provided, that the
failure of Holder hereof to make any such request shall not affect the
continuing obligation of Company to Holder hereof in respect of such rights.
 
14.          Descriptive Headings and Governing Law.  The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant.  This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
 
15.          Lost Warrants or Stock Certificates.  The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
 
16.          Fractional Shares.  No fractional shares shall be issued upon
exercise of this Warrant.  The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
 
17.          Representations of Holder.  With respect to this Warrant, Holder
represents and warrants to the Company as follows:
 
17.1           Experience.  It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in this Warrant (and the securities issuable upon exercise
thereof) involves substantial risks; it has made detailed inquiries concerning
the Company, its business and services, its officers and its personnel; the
officers of the Company have made available to Holder any and all written
information it has requested; the officers of the Company have answered to
Holder’s satisfaction all inquiries made by it; in making this investment it has
relied upon information made available to it by the Company; and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Company and it is able to
bear the economic risk of that investment. Holder is an “accredited investor”
within the meaning of Regulation D promulgated under the Securities Act.
 
17.2           Investment.  It is acquiring this Warrant (and the securities
issuable upon exercise thereof) for investment for its own account and not with
a view to, or for resale in connection with, any distribution thereof.  It
understands that this Warrant, the shares of Common Stock issuable upon exercise
thereof have not been registered under the Securities Act, nor qualified under
applicable state securities laws.

 
 

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17.3           Rule 144.  It acknowledges that this Warrant and the Common Stock
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.  It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act.
 
17.4           Access to Data.  It has had an opportunity to discuss the
Company’s business, management and financial affairs with the Company’s
management and has had the opportunity to inspect the Company’s facilities.
 
18.         Additional Representations and Covenants of the Company.  The
Company hereby represents, warrants and agrees as follows:
 
18.1           Corporate Power.  The Company has all requisite corporate power
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
 
18.2           Authorization.  All corporate action on the part of the Company,
its directors and stockholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken.  This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
 
18.3           Offering.  Subject in part to the truth and accuracy of Holder’s
representations set forth in Section 17 hereof, the offer, issuance and sale of
this Warrant is, and the issuance of Common Stock upon exercise of this Warrant
will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities
laws; and neither the Company nor anyone acting on its behalf will take any
action hereafter that would cause the loss of such exemptions.
 
18.4           Listing; Stock Issuance.  The Company shall secure and maintain
the listing of the Common Stock issuable upon exercise of this Warrant upon each
securities exchange or over-the-counter market upon which securities of the same
class or series issued by Company are listed, if any.  Upon exercise of this
Warrant, the Company will use its best efforts to cause stock certificates
representing the shares of Common Stock purchased pursuant to the exercise to be
issued in the names of Holder, its nominees or assignees, as appropriate at the
time of such exercise.
 
18.5           Certificates and By-Laws.  The Company has provided Holder with
true and complete copies of the Company’s Certificate of Incorporation, By-Laws,
and each Certificate of Designation or other charter document setting, forth any
rights, preferences and privileges of Company’s capital stock, each as amended
and in effect on the date of issuance of this Warrant.
 
18.7           Financial and Other Reports.  From time to time up to the earlier
of the Expiration Date or the complete exercise of this Warrant, the Company
shall furnish to Holder (i) within 90 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close of
each fiscal quarter of the Company, an unaudited balance sheet and statement of
cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its stockholders and all
registration statements and reports that the Company files with the SEC or any
other governmental or regulatory authority, provided, however, that if any
document required to be furnished under this Section 18.7 is filed with the
Securities and Exchange Commission and is publicly available for review on the
EDGAR system, then in lieu of furnishing such document, the Company may instead
give the Holder written notice of the filing of such document.  In addition, the
Company agrees to provide the Holder at any time and from time to time with such
information as the Holder may reasonably request for purposes of the Holder’s
compliance with regulatory, accounting and reporting requirements applicable to
the Holder.

 
 

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SIGNATURE PAGE
 
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its officer, thereunto duly authorized as of the date of issuance set forth on
the first page hereof.

XENOGENICS CORPORATION
 
By:
 
Name: W. Gerald Newmin
Title:   Chairman & CEO

 
 

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FORM OF SUBSCRIPTION
 
(To be signed only upon exercise of Warrant)
 
To:
 

 
¨
The undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, (1) See Below ______(___ ) shares (the “Shares”) of Common Stock of
XENOGENICS CORPORATION and herewith makes payment of _____ Dollars ($____ )
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to, ________, whose address is _______.

 
¨
The undersigned hereby elects to convert ______ percent (___%) of the value of
the Warrant pursuant to the provisions of Section 1(b) of the Warrant.

 
The undersigned acknowledges that it has reviewed the representations and
warranties contained in Section 17 of this Warrant and by its signature below
hereby makes such representations and warranties to the Company.
 
Dated
     
Holder:
     
By:
     
Its:
     
(Address)
                 

 
(1) 
Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be issuable upon
exercise.

 
 

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ASSIGNMENT
 
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth herein below, unto:
 
Name of Assignee
  
Address
  
No. of Shares
  
                             

 
Dated
     
Holder:
     
By:
     
Its:
 

 
 
 

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EXHIBIT “A”
 
[On letterhead of the Company]
 
Reference is hereby made to that certain Warrant dated ____, 2010, issued by
XENOGENICS CORPORATION, a Nevada corporation (the “Company”), to VENTURE
LENDING & LEASING IV, LLC (the “Holder”).
 
[IF APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the Warrant
that the following adjustment(s) have been made to the Warrant: [describe
adjustments, setting forth details regarding method of calculation and facts
upon which calculation is based].
 
This certifies that the Holder is entitled to purchase from the Company
_________ (______) fully paid and nonassessable shares of the Company’s Common
Stock at a price of Dollars ($_____) per share (the “Stock Purchase
Price”).  The Stock Purchase Price and the number of shares purchasable under
the Warrant remain subject to adjustment as provided in Section 4 of the
Warrant.
 
Executed this ___ day of ________, 20___.
 
XENOGENICS CORPORATION
 
By:
     
Name:
     
Title:
 

 
 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR, SUBJECT
TO SECTION 2(B) BELOW, AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION THEREFROM
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
Date of issuance: September __, 2010
 
Expiration Date: September __, 2020
 
WARRANT TO PURCHASE

 
SHARES OF COMMON STOCK OF

 
XENOGENICS CORPORATION
 
This certifies that VENTURE LENDING & LEASING V, LLC, or assigns (the “Holder”),
for value received, is entitled to purchase from XENOGENICS CORPORATION, a
Nevada corporation (the “Company”), One Hundred Seventy-five Thousand and Four
(175,004) fully paid and nonassessable shares of the Company’s Common Stock
(“Common Stock”) for cash at a price of $0.038 per share (the “Stock Purchase
Price”) at any time or from time to time up to and including 5:00 p.m. (Pacific
time) on September __, 2020 (the “Expiration Date”), upon surrender to the
Company at its principal office at 68 Cumberland Street, Suite 301, Woonsocket,
Rhode Island 02895 (or at such other location as the Company may advise Holder
in writing), of this Warrant properly endorsed with the Form of Subscription
attached hereto, duly filled in and signed and upon payment in cash or by check
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions
hereof.  The Holder may also exercise this Warrant on a cashless or “net
issuance” basis as described in Section 1(b) below.
 
This Warrant is subject to the following terms and conditions:
 
1.           Exercise; Issuance of Certificates; Payment for Shares.
 
(a)             Unless an election is made pursuant to clause (b) of this
Section 1, this Warrant shall be exercisable at the option of the Holder, at any
time or from time to time, on or before the Expiration Date for all or any
portion of the shares of Common Stock (but not for a fraction of a share) which
may be purchased hereunder for the Stock Purchase Price multiplied by the number
of shares to be purchased.  The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which the form of subscription shall have been delivered and payment
made for such shares.  Subject to the provisions of Section 2, certificates for
the shares of Common Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company’s expense within a
reasonable time after the rights represented by this Warrant have been so
exercised.  Except as provided in clause (b) of this Section 1, in case of a
purchase of less than all the shares which may be purchased under this Warrant,
the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under this
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time.  Each stock certificate so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered in
the name of such Holder or such other name as shall be designated by such
Holder, subject to the limitations contained in Section 2.

 
 

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(b)             The Holder, in lieu of exercising this Warrant by the cash
payment of the Stock Purchase Price pursuant to clause (a) of this Section 1,
may elect, at any time on or before the Expiration Date, to surrender this
Warrant and receive that number of shares of Common Stock equal to the quotient
of: (i) the difference between (A) the Per Share Price (as hereinafter defined)
of the Common Stock, less (B) the Stock Purchase Price then in effect,
multiplied by the number of shares of Common Stock the Holder would otherwise
have been entitled to purchase hereunder pursuant to clause (a) of this
Section 1 (or such lesser number of shares as the Holder may designate in the
case of a partial exercise of this Warrant); over (ii) the Per Share
Price.  Election to exercise under this Section 1(b) may be made by delivering a
signed form of subscription to the Company via facsimile, to be followed by
delivery of this Warrant.  Notwithstanding anything to the contrary contained in
this Warrant, if as of the close of business on the last business day preceding
the Expiration Date this Warrant remains unexercised as to all or a portion of
the shares of Common Stock purchasable hereunder, then effective as 9:00 a.m.
(Pacific time) on the Expiration Date, the Holder shall be deemed, automatically
and without need for notice to the Company, to have elected to exercise this
Warrant in full pursuant to the provisions of this Section 1(b), and upon
surrender of this Warrant shall be entitled to receive that number of shares of
Common Stock computed using the above formula.
 
(c)             For purposes of clause (b) of this Section 1, “Per Share Price”
means the closing price of the Common Stock as quoted by NASDAQ or listed on any
exchange, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the trading day immediately prior to the date of the
Holder’s election hereunder.  If the Common Stock is not quoted by NASDAQ or
listed on an exchange and none of the above clauses apply, the Per Share Price
of the Common Stock shall be the price per share which the Company would obtain
from a willing buyer for shares sold by the Company from authorized but unissued
shares as such price shall be agreed upon by the Holder and the Company or, if
agreement cannot be reached within ten (10) business days of the Holder’s
election hereunder, as such price shall be determined in good faith by the
Company’s board of directors.
 
2.           Limitation on Transfer.
 
(a)             This Warrant and the Common Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to ensure compliance with the provisions of the Securities Act.  Each
holder of this Warrant or the Common Stock issuable hereunder will cause any
proposed transferee of the Warrant or Common Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2.  Subject to the provisions of this Section 2 and upon providing
Company with written notice, the Holder may freely transfer all or part of this
Warrant or the shares issuable upon exercise of this Warrant (or the shares
issuable, directly or indirectly, upon conversion of the shares, if any) to any
transferee, provided, however, in connection with any such transfer, the Holder
will give Company notice of the portion of the Warrant being transferred setting
forth the name, address and taxpayer identification number of the transferee and
Holder will surrender this Warrant to Company for reissuance to the
transferee(s) (and Holder, if applicable).

 
 

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(b)           The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer this Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
 
3.           Shares to be Fully Paid; Reservation of Shares.  The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock when and as required to provide for the exercise of the
rights represented by this Warrant.  The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.  The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as described in Section 4 hereof) (i) if
the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company’s Certificate of Incorporation, (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of the Company’s preferred stock together with all shares of
Common Stock then outstanding and then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding would exceed
the total number of shares of Common Stock then authorized by the Company’s
Certificate of Incorporation or (iii) if the par value per share of the Common
Stock would exceed the Stock Purchase Price.
 
4.           Adjustment of Stock Purchase Price Number of Shares.  The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4.  Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
 
4.1           Subdivision or Combination of Stock.  In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

 
 

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4.2           Dividends in Common Stock, Other Stock, Property,
Reclassification.  If at any time or from time to time the holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
 
  (a)             Common Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or options to
subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or
 
  (b)            any cash paid or payable otherwise than as a cash dividend, or
 
  (c)             Common Stock or other or additional stock or other securities
or property (including cash) by way of spin off, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split, adjustments in respect of which shall be
covered by the terms of Section 4.1 above),
 
 then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had it been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares and/or all other additional stock and other
securities and property.
 
4.3           Change of Control; IPO.  In the event of (i) a Change of Control
(as hereinafter defined) or (ii) the consummation of a sale of the Company’s
securities pursuant to a registration statement filed by Company under the
Securities Act (or pursuant to the laws of the jurisdiction in which the initial
public offering is completed), in connection with the first firm commitment
underwritten offering of the Company’s securities to the general public that
occurs after the date this Warrant is issued (“IPO”), this Warrant shall be
automatically exchanged for a number of shares of the Company’s securities, such
number of shares being equal to the maximum number of shares issuable pursuant
to the terms hereof (after taking into account all adjustments described herein)
had the Holder elected to exercise this Warrant immediately prior to the closing
of such Change of Control or IPO and purchased all such shares pursuant to the
cash exercise provision set forth in Section 1(a) hereof (as opposed to the
cashless exercise provision set forth in Section 1(b)).  The Company
acknowledges and agrees that the Holder shall not be required to make any
additional payment (cash or otherwise) for such shares as further consideration
for their issuance pursuant to the terms of the preceding sentence.  “Change of
Control” shall mean any sale, license, or other disposition of all or
substantially all of the assets of the Company, any reorganization,
consolidation, merger or other transaction involving the Company where the
holders of the Company’s securities before the transaction beneficially own less
than 50% of the outstanding voting securities of the surviving entity after the
transaction.  This Warrant shall terminate upon the Holder’s receipt of the
number of shares of the Company’s equity securities described in this
Section 4.3.
 
4.4           Notice of Adjustment.  Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company.  The
notice, which may be substantially in the form of Exhibit “A” attached hereto,
shall be signed by the Company’s chief financial officer and shall state the
Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

 
 

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4.5           Other Notices.  If at any time:
 
  (a)                 the Company shall declare any cash dividend upon its
Common Stock;
 
  (b)                 the Company shall declare any dividend upon its Common
Stock payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
 
  (c)                 there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another entity;
 
  (d)                 there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
 
  (e)                 the Company shall take or propose to take any other
action, notice of which is actually provided to holders of the Common Stock;
 
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (i) at least 20 day’s prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend or distribution or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action, at least 20 day’s written notice of the date when the same shall take
place.  Any notice given in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend or distribution, the date on which the
holders of Common Stock shall be entitled thereto. Any notice given in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action as the case may be.
 
4.6           Certain Events. If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not fairly
effect the adjustments to this Warrant in accordance with the essential intent
and principles of such provisions, then the Board of Directors of the Company
shall make in good faith an adjustment in the number and class of shares
issuable under this Warrant, the Stock Purchase Price and/or the application of
such provisions, in accordance with such essential intent and principles, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of this Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as the Holder would
have owned had this Warrant been exercised prior to the event and had the Holder
continued to hold such shares until after the event requiring adjustment.
 
5.            Issue Tax. The issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder of
this Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of this Warrant being exercised.

 
 

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6.            Closing of Books. The Company will at no time close its transfer
books against the transfer of this Warrant or of any shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
 
7.            No Voting or Dividend Rights; Limitation of Liability.  Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a stockholder in respect of meetings
of stockholders for the election of directors of the Company or any other
matters or any rights whatsoever as a stockholder of the Company.  No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised.  No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by its creditors.
 
8.            Amendment of Certificate of Incorporation.  Unless the holder of
this Warrant consents thereto in writing, the Company shall not amend its
Certificate of Incorporation prior to the exercise of this Warrant if the effect
of such amendment on the Holder hereof would be more adverse to the Holder
hereof than, and substantially dissimilar to, its effect on the other holders of
the Company’s Common Stock.
 
9.            Registration Rights.  The Holder hereof shall be entitled, with
respect to the shares of Common Stock issued upon exercise hereof to all of the
registration rights set forth in any agreement entered into after the date of
issuance of this Warrant among the Company and its investors whereby such
investors are provided registration rights (as applicable, the “Rights
Agreement”) to the same extent and on the same terms and conditions as possessed
by the investors thereunder with the following exceptions and clarifications:
(i) the Holder will be subject to the same provisions regarding indemnification
as contained in the Rights Agreement; and (ii) the registration rights are
freely assignable by the Holder of this Warrant in connection with a permitted
transfer of this Warrant or the shares issuable upon exercise hereof.  The
Company shall take such action as may be reasonably necessary to assure that the
granting of such registration rights to the Holder does not violate the
provisions of the Rights Agreement or any of the Company’s charter documents or
rights of prior grantees of registration rights.
 
10.           Rights and Obligations Survive Exercise of Warrant.  The rights
and obligations of the Company, of the Holder of this Warrant and of the holder
of shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
 
11.           Modification and Waiver.  This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
 
12.           Notices.  Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
deemed to have been given (i) upon receipt if delivered personally or by courier
(ii) upon confirmation of receipt if by telecopy or (iii) three business days
after deposit in the US mail, with postage prepaid and certified or registered,
to each such Holder at its address as shown on the books of the Company or to
the Company at the address indicated therefor in the first paragraph of this
Warrant.

 
 

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13.           Binding Effect on Successors.  This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company’s assets.  All of the obligations of
the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant.  All of the
covenants and agreements of Company shall inure to the benefit of the successors
and assigns of Holder hereof.  Company will, at the time of the exercise of this
Warrant, in whole or in part, upon request of Holder hereof but at Company’s
expense, acknowledge in writing its continuing obligation to Holder hereof in
respect of any rights (including, without limitation, any right to registration
of the shares of Common Stock) to which Holder hereof shall continue to be
entitled after such exercise in accordance with this Warrant; provided, that the
failure of Holder hereof to make any such request shall not affect the
continuing obligation of Company to Holder hereof in respect of such rights.
 
14.           Descriptive Headings and Governing Law.  The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant.  This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
 
15.           Lost Warrants or Stock Certificates.  The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
 
16.           Fractional Shares.  No fractional shares shall be issued upon
exercise of this Warrant.  The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
 
17.           Representations of Holder.  With respect to this Warrant, Holder
represents and warrants to the Company as follows:
 
17.1          Experience. It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in this Warrant (and the securities issuable upon exercise
thereof) involves substantial risks; it has made detailed inquiries concerning
the Company, its business and services, its officers and its personnel; the
officers of the Company have made available to Holder any and all written
information it has requested; the officers of the Company have answered to
Holder’s satisfaction all inquiries made by it; in making this investment it has
relied upon information made available to it by the Company; and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Company and it is able to
bear the economic risk of that investment. Holder is an “accredited investor”
within the meaning of Regulation D promulgated under the Securities Act.
 
17.2          Investment. It is acquiring this Warrant (and the securities
issuable upon exercise thereof) for investment for its own account and not with
a view to, or for resale in connection with, any distribution thereof. It
understands that this Warrant, the shares of Common Stock issuable upon exercise
thereof have not been registered under the Securities Act, nor qualified under
applicable state securities laws.
 
17.3          Rule 144. It acknowledges that this Warrant and the Common Stock
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act.

 
 

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17.4          Access to Data. It has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management and has
had the opportunity to inspect the Company’s facilities.
 
18.           Additional Representations and Covenants of the Company. The
Company hereby represents, warrants and agrees as follows:
 
18.1         Corporate Power. The Company has all requisite corporate power and
corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
 
18.2         Authorization. All corporate action on the part of the Company, its
directors and stockholders necessary for the authorization, execution, delivery
and performance by the Company of this has been taken. This Warrant is a valid
and binding obligation of the Company, enforceable in accordance with its terms.
 
18.3         Offering. Subject in part to the truth and accuracy of Holder’s
representations set forth in Section 17 hereof, the offer, issuance and sale of
this Warrant is, and the issuance of Common Stock upon exercise of this Warrant
will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities
laws; and neither the Company nor anyone acting on its behalf will take any
action hereafter that would cause the loss of such exemptions.
 
18.4         Listing; Stock Issuance. The Company shall secure and maintain the
listing of the Common Stock issuable upon exercise of this Warrant upon each
securities exchange or over-the-counter market upon which securities of the same
class or series issued by Company are listed, if any.  Upon exercise of this
Warrant, the Company will use its best efforts to cause stock certificates
representing the shares of Common Stock purchased pursuant to the exercise to be
issued in the names of Holder, its nominees or assignees, as appropriate at the
time of such exercise.
 
18.5         Certificates and By-Laws.  The Company has provided Holder with
true and complete copies of the Company’s Certificate of Incorporation, By-Laws,
and each Certificate of Designation or other charter document setting, forth any
rights, preferences and privileges of Company’s capital stock, each as amended
and in effect on the date of issuance of this Warrant.
 
18.6         Financial and Other Reports.  From time to time up to the earlier
of the Expiration Date or the complete exercise of this Warrant, the Company
shall furnish to Holder (i) within 90 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close of
each fiscal quarter of the Company, an unaudited balance sheet and statement of
cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its stockholders and all
registration statements and reports that the Company files with the SEC or any
other governmental or regulatory authority, provided, however, that if any
document required to be furnished under this Section 18.7 is filed with the
Securities and Exchange Commission and is publicly available for review on the
EDGAR system, then in lieu of furnishing such document, the Company may instead
give the Holder written notice of the filing of such document.  In addition, the
Company agrees to provide the Holder at any time and from time to time with such
information as the Holder may reasonably request for purposes of the Holder’s
compliance with regulatory, accounting and reporting requirements applicable to
the Holder.

 
 

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SIGNATURE PAGE
 
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its officer, thereunto duly authorized as of the date of issuance set forth on
the first page hereof.
 
XENOGENICS CORPORATION

By:
 
Name:  
W. Gerald Newmin
Title:
Chairman & CEO

 
 

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FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)

To:
 

 
¨
The undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, (1) See Below ________ (_____ ) shares (the “Shares”) of Common
Stock of XENOGENICS CORPORATION and herewith makes payment of ________ Dollars
($______ ) therefor, and requests that the certificates for such shares be
issued in the name of, and delivered to, ______, whose address is ______.

 
¨
The undersigned hereby elects to convert ______ percent (___%) of the value of
the Warrant pursuant to the provisions of Section 1(b) of the Warrant.

 
The undersigned acknowledges that it has reviewed the representations and
warranties contained in Section 17 of this Warrant and by its signature below
hereby makes such representations and warranties to the Company.
 
Dated
         
Holder:  
         
By:
         
Its:
         
(Address)
                   

 
(1)
Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be issuable upon
exercise.

 
 

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ASSIGNMENT
 
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth herein below, unto:
 
Name of Assignee
 
Address
 
No. of Shares
                   

 
Dated
         
Holder:
         
By:
         
Its:
   

 
 

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EXHIBIT “A”

[On letterhead of the Company]
 
Reference is hereby made to that certain Warrant dated _________, 2010, issued
by XENOGENICS CORPORATION, a Nevada corporation (the “Company”), to VENTURE
LENDING & LEASING V, LLC (the “Holder”).
 
[IF APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the Warrant
that the following adjustment(s) have been made to the Warrant: [describe
adjustments, setting forth details regarding method of calculation and facts
upon which calculation is based].
 
This certifies that the Holder is entitled to purchase from the Company
_______________(_____) fully paid and nonassessable shares of the Company’s
Common Stock at a price of ______ Dollars ($____) per share (the “Stock Purchase
Price”).  The Stock Purchase Price and the number of shares purchasable under
the Warrant remain subject to adjustment as provided in Section 4 of the
Warrant.
 
Executed this ___ day of ________, 20___.

XENOGENICS CORPORATION
     
By:
         
Name:
         
Title:
   

 
 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR, SUBJECT
TO SECTION 2(B) BELOW, AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION THEREFROM
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
Date of issuance: September __, 2010
 
Expiration Date: September __, 2020
 
WARRANT TO PURCHASE
 
SHARES OF COMMON STOCK OF
 
XENOGENICS CORPORATION
 
This certifies that SILICON VALLEY BANK, or assigns (the “Holder”), for value
received, is entitled to purchase from XENOGENICS CORPORATION, a Nevada
corporation (the “Company”), One Hundred Thirty-nine Thousand Nine Hundred
Ninety-three (139,993) fully paid and nonassessable shares of the Company’s
Common Stock (“Common Stock”) for cash at a price of $0.038 per share (the
“Stock Purchase Price”) at any time or from time to time up to and including
5:00 p.m. (Pacific time) on September __, 2020 (the “Expiration Date”), upon
surrender to the Company at its principal office at 68 Cumberland Street, Suite
301, Woonsocket, Rhode Island 02895 (or at such other location as the Company
may advise Holder in writing), of this Warrant properly endorsed with the Form
of Subscription attached hereto, duly filled in and signed and upon payment in
cash or by check of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof. The Holder may also exercise this Warrant on a cashless or
“net issuance” basis as described in Section 1(b) below.
 
This Warrant is subject to the following terms and conditions:
 
1.           Exercise; Issuance of Certificates; Payment for Shares.
 
(a)          Unless an election is made pursuant to clause (b) of this
Section 1, this Warrant shall be exercisable at the option of the Holder, at any
time or from time to time, on or before the Expiration Date for all or any
portion of the shares of Common Stock (but not for a fraction of a share) which
may be purchased hereunder for the Stock Purchase Price multiplied by the number
of shares to be purchased. The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of business on the
date on which the form of subscription shall have been delivered and payment
made for such shares. Subject to the provisions of Section 2, certificates for
the shares of Common Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company’s expense within a
reasonable time after the rights represented by this Warrant have been so
exercised.  Except as provided in clause (b) of this Section 1, in case of a
purchase of less than all the shares which may be purchased under this Warrant,
the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under this
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time.  Each stock certificate so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered in
the name of such Holder or such other name as shall be designated by such
Holder, subject to the limitations contained in Section 2.

 
 

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(b)          The Holder, in lieu of exercising this Warrant by the cash payment
of the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect,
at any time on or before the Expiration Date, to surrender this Warrant and
receive that number of shares of Common Stock equal to the quotient of: (i) the
difference between (A) the Per Share Price (as hereinafter defined) of the
Common Stock, less (B) the Stock Purchase Price then in effect, multiplied by
the number of shares of Common Stock the Holder would otherwise have been
entitled to purchase hereunder pursuant to clause (a) of this Section 1 (or such
lesser number of shares as the Holder may designate in the case of a partial
exercise of this Warrant); over (ii) the Per Share Price. Election to exercise
under this Section 1(b) may be made by delivering a signed form of subscription
to the Company via facsimile, to be followed by delivery of this
Warrant.  Notwithstanding anything to the contrary contained in this Warrant, if
as of the close of business on the last business day preceding the Expiration
Date this Warrant remains unexercised as to all or a portion of the shares of
Common Stock purchasable hereunder, then effective as 9:00 a.m. (Pacific time)
on the Expiration Date, the Holder shall be deemed, automatically and without
need for notice to the Company, to have elected to exercise this Warrant in full
pursuant to the provisions of this Section 1(b), and upon surrender of this
Warrant shall be entitled to receive that number of shares of Common Stock
computed using the above formula.
 
(c)           For purposes of clause (b) of this Section 1, “Per Share Price”
means the closing price of the Common Stock as quoted by NASDAQ or listed on any
exchange, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the trading day immediately prior to the date of the
Holder’s election hereunder. If the Common Stock is not quoted by NASDAQ or
listed on an exchange and none of the above clauses apply, the Per Share Price
of the Common Stock shall be the price per share which the Company would obtain
from a willing buyer for shares sold by the Company from authorized but unissued
shares as such price shall be agreed upon by the Holder and the Company or, if
agreement cannot be reached within ten (10) business days of the Holder’s
election hereunder, as such price shall be determined in good faith by the
Company’s board of directors.
 
2.           Limitation on Transfer.
 
(a)            This Warrant and the Common Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to ensure compliance with the provisions of the Securities Act. Each
holder of this Warrant or the Common Stock issuable hereunder will cause any
proposed transferee of the Warrant or Common Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2. Notwithstanding the foregoing and any other provision of this
Section 2, after receipt by the Holder of the executed Warrant, the Holder will
transfer all of this Warrant to Holder’s parent company, SVB Financial Group, or
any other affiliate of the Holder, by execution of an Assignment substantially
in the form of Appendix 2. Subject to the provisions of this Section 2 and upon
providing Company with written notice, SVB Financial Group and any subsequent
Holder may freely transfer all or part of this Warrant or the shares issuable
upon exercise of this Warrant (or the shares issuable, directly or indirectly,
upon conversion of the shares, if any) to any transferee, provided, however, in
connection with any such transfer, SVB Financial Group or any subsequent Holder
will give Company notice of the portion of the Warrant being transferred setting
forth the name, address and taxpayer identification number of the transferee and
Holder will surrender this Warrant to Company for reissuance to the
transferee(s) (and Holder, if applicable).

 
 

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(b)           The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer this Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available. The Company shall not require the
Holder to provide an opinion of counsel if the transfer is to the Holder’s
parent company, SVB Financial Group (formerly Silicon Valley Bancshares), or any
other affiliate of the Holder.
 
3.           Shares to be Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock when and as required to provide for the exercise of the
rights represented by this Warrant.  The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.  The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as described in Section 4 hereof) (i) if
the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company’s Certificate of Incorporation, (ii) if the total
number of shares of Common Stock issuable after such action upon the conversion
of all such shares of the Company’s preferred stock together with all shares of
Common Stock then outstanding and then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding would exceed
the total number of shares of Common Stock then authorized by the Company’s
Certificate of Incorporation or (iii) if the par value per share of the Common
Stock would exceed the Stock Purchase Price.
 
4.           Adjustment of Stock Purchase Price Number of Shares.  The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4.  Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
 
4.1           Subdivision or Combination of Stock.  In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

 
 

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4.2           Dividends in Common Stock, Other Stock, Property,
Reclassification.  If at any time or from time to time the holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
 
(a)             Common Stock, or any shares of stock or other securities whether
or not such securities are at any time directly or indirectly convertible into
or exchangeable for Common Stock, or
 
(b)            any rights or options to subscribe for, purchase or otherwise
acquire any of the foregoing by way of dividend or other distribution, or any
cash paid or payable otherwise than as a cash dividend, or
 
(c)             Common Stock or other or additional stock or other securities or
property (including cash) by way of spin off, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split, adjustments in respect of which shall be
covered by the terms of Section 4.1 above), then and in each such case, the
Holder hereof shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock
and other securities and property (including cash in the cases referred to in
clauses (b) and (c) above) which such Holder would hold on the date of such
exercise had it been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
and/or all other additional stock and other securities and property.
 
4.3           Change of Control; IPO.  In the event of (i) a Change of Control
(as hereinafter defined) or (ii) the consummation of a sale of the Company’s
securities pursuant to a registration statement filed by Company under the
Securities Act (or pursuant to the laws of the jurisdiction in which the initial
public offering is completed), in connection with the first firm commitment
underwritten offering of the Company’s securities to the general public that
occurs after the date this Warrant is issued (“IPO”), this Warrant shall be
automatically exchanged for a number of shares of the Company’s securities, such
number of shares being equal to the maximum number of shares issuable pursuant
to the terms hereof (after taking into account all adjustments described herein)
had the Holder elected to exercise this Warrant immediately prior to the closing
of such Change of Control or IPO and purchased all such shares pursuant to the
cash exercise provision set forth in Section 1(a) hereof (as opposed to the
cashless exercise provision set forth in Section 1(b)).  The Company
acknowledges and agrees that the Holder shall not be required to make any
additional payment (cash or otherwise) for such shares as further consideration
for their issuance pursuant to the terms of the preceding sentence.  “Change of
Control” shall mean any sale, license, or other disposition of all or
substantially all of the assets of the Company, any reorganization,
consolidation, merger or other transaction involving the Company where the
holders of the Company’s securities before the transaction beneficially own less
than 50% of the outstanding voting securities of the surviving entity after the
transaction.  This Warrant shall terminate upon the Holder’s receipt of the
number of shares of the Company’s equity securities described in this
Section 4.3.

 
 

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4.4           Notice of Adjustment.  Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company.  The
notice, which may be substantially in the form of Exhibit “A” attached hereto,
shall be signed by the Company’s chief financial officer and shall state the
Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
 
4.5           Other Notices.  If at any time:
 
(a)         the Company shall declare any cash dividend upon its Common Stock;
 
(b)         the Company shall declare any dividend upon its Common Stock payable
in stock or make any special dividend or other distribution to the holders of
its Common Stock;
 
(c)         there shall be any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with, or
sale of all or substantially all of its assets to, another entity;
 
(d)         there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
 
(e)         the Company shall take or propose to take any other action, notice
of which is actually provided to holders of the Common Stock; then, in any one
or more of said cases, the Company shall give, by first class mail, postage
prepaid, addressed to the Holder of this Warrant at the address of such Holder
as shown on the books of the Company, (i) at least 20 day’s prior written notice
of the date on which the books of the Company shall close or a record shall be
taken for such dividend or distribution or for determining rights to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action and (ii) in the
case of any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, or other action, at least 20 day’s
written notice of the date when the same shall take place.  Any notice given in
accordance with the foregoing clause (i) shall also specify, in the case of any
such dividend or distribution, the date on which the holders of Common Stock
shall be entitled thereto.  Any notice given in accordance with the foregoing
clause (ii) shall also specify the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, or other action as the
case may be.
 
4.6           Certain Events.  If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 4 are not strictly applicable or if strictly applicable would not fairly
effect the adjustments to this Warrant in accordance with the essential intent
and principles of such provisions, then the Board of Directors of the Company
shall make in good faith an adjustment in the number and class of shares
issuable under this Warrant, the Stock Purchase Price and/or the application of
such provisions, in accordance with such essential intent and principles, so as
to protect such purchase rights as aforesaid.  The adjustment shall be such as
will give the Holder of this Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as the Holder would
have owned had this Warrant been exercised prior to the event and had the Holder
continued to hold such shares until after the event requiring adjustment.
 
5.           Issue Tax.  The issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder of
this Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of this Warrant being exercised.

 
 

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6.           Closing of Books.  The Company will at no time close its transfer
books against the transfer of this Warrant or of any shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
 
7.           No Voting or Dividend Rights; Limitation of Liability.  Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a stockholder in respect of meetings
of stockholders for the election of directors of the Company or any other
matters or any rights whatsoever as a stockholder of the Company.  No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised.  No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by its creditors.
 
8.           Amendment of Certificate of Incorporation.  Unless the holder of
this Warrant consents thereto in writing, the Company shall not amend its
Certificate of Incorporation prior to the exercise of this Warrant if the effect
of such amendment on the Holder hereof would be more adverse to the Holder
hereof than, and substantially dissimilar to, its effect on the other holders of
the Company’s Common Stock.
 
9.           Registration Rights.  The Holder hereof shall be entitled, with
respect to the shares of Common Stock issued upon exercise hereof to all of the
registration rights set forth in any agreement entered into after the date of
issuance of this Warrant among the Company and its investors whereby such
investors are provided registration rights (as applicable, the “Rights
Agreement”) to the same extent and on the same terms and conditions as possessed
by the investors thereunder with the following exceptions and clarifications:
(i) the Holder will be subject to the same provisions regarding indemnification
as contained in the Rights Agreement; and (ii) the registration rights are
freely assignable by the Holder of this Warrant in connection with a permitted
transfer of this Warrant or the shares issuable upon exercise hereof.  The
Company shall take such action as may be reasonably necessary to assure that the
granting of such registration rights to the Holder does not violate the
provisions of the Rights Agreement or any of the Company’s charter documents or
rights of prior grantees of registration rights.
 
10.         Rights and Obligations Survive Exercise of Warrant.  The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
 
11.         Modification and Waiver.  This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
 
12.         Notices.  Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
deemed to have been given (i) upon receipt if delivered personally or by courier
(ii) upon confirmation of receipt if by telecopy or (iii) three business days
after deposit in the US mail, with postage prepaid and certified or registered,
to each such Holder at its address as shown on the books of the Company or to
the Company at the address indicated therefor in the first paragraph of this
Warrant.

 
 

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13.         Binding Effect on Successors.  This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company’s assets.  All of the obligations of
the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant.  All of the
covenants and agreements of Company shall inure to the benefit of the successors
and assigns of Holder hereof.  Company will, at the time of the exercise of this
Warrant, in whole or in part, upon request of Holder hereof but at Company’s
expense, acknowledge in writing its continuing obligation to Holder hereof in
respect of any rights (including, without limitation, any right to registration
of the shares of Common Stock) to which Holder hereof shall continue to be
entitled after such exercise in accordance with this Warrant; provided, that the
failure of Holder hereof to make any such request shall not affect the
continuing obligation of Company to Holder hereof in respect of such rights.
 
14.         Descriptive Headings and Governing Law.  The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.  This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
 
15.         Lost Warrants or Stock Certificates.  The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
 
16.         Fractional Shares.  No fractional shares shall be issued upon
exercise of this Warrant.  The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
 
17.         Representations of Holder.  With respect to this Warrant, Holder
represents and warrants to the Company as follows:
 
17.1          Experience.  It is experienced in evaluating and investing in
companies engaged in businesses similar to that of the Company; it understands
that investment in this Warrant (and the securities issuable upon exercise
thereof) involves substantial risks; it has made detailed inquiries concerning
the Company, its business and services, its officers and its personnel; the
officers of the Company have made available to Holder any and all written
information it has requested; the officers of the Company have answered to
Holder’s satisfaction all inquiries made by it; in making this investment it has
relied upon information made available to it by the Company; and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Company and it is able to
bear the economic risk of that investment.  Holder is an “accredited investor”
within the meaning of Regulation D promulgated under the Securities Act.
 
17.2          Investment.  It is acquiring this Warrant (and the securities
issuable upon exercise thereof) for investment for its own account and not with
a view to, or for resale in connection with, any distribution thereof.  It
understands that this Warrant, the shares of Common Stock issuable upon exercise
thereof have not been registered under the Securities Act, nor qualified under
applicable state securities laws.

 
 

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17.3         Rule 144.  It acknowledges that this Warrant and the Common Stock
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.  It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act.
 
17.4         Access to Data.  It has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management and has
had the opportunity to inspect the Company’s facilities.
 
18.          Additional Representations and Covenants of the Company.  The
Company hereby represents, warrants and agrees as follows:
 
18.1         Corporate Power.  The Company has all requisite corporate power and
corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
 
18.2         Authorization.  All corporate action on the part of the Company,
its directors and stockholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken.  This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
 
18.3         Offering.  Subject in part to the truth and accuracy of Holder’s
representations set forth in Section 17 hereof, the offer, issuance and sale of
this Warrant is, and the issuance of Common Stock upon exercise of this Warrant
will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities
laws; and neither the Company nor anyone acting on its behalf will take any
action hereafter that would cause the loss of such exemptions.
 
18.4         Listing; Stock Issuance.  The Company shall secure and maintain the
listing of the Common Stock issuable upon exercise of this Warrant upon each
securities exchange or over-the-counter market upon which securities of the same
class or series issued by Company are listed, if any.  Upon exercise of this
Warrant, the Company will use its best efforts to cause stock certificates
representing the shares of Common Stock purchased pursuant to the exercise to be
issued in the names of Holder, its nominees or assignees, as appropriate at the
time of such exercise.
 
18.5         Certificates and By-Laws.  The Company has provided Holder with
true and complete copies of the Company’s Certificate of Incorporation, By-Laws,
and each Certificate of Designation or other charter document setting, forth any
rights, preferences and privileges of Company’s capital stock, each as amended
and in effect on the date of issuance of this Warrant.
 
18.6         Financial and Other Reports.  From time to time up to the earlier
of the Expiration Date or the complete exercise of this Warrant, the Company
shall furnish to Holder (i) within 90 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close of
each fiscal quarter of the Company, an unaudited balance sheet and statement of
cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its stockholders and all
registration statements and reports that the Company files with the SEC or any
other governmental or regulatory authority, provided, however, that if any
document required to be furnished under this Section 18.7 is filed with the
Securities and Exchange Commission and is publicly available for review on the
EDGAR system, then in lieu of furnishing such document, the Company may instead
give the Holder written notice of the filing of such document.  In addition, the
Company agrees to provide the Holder at any time and from time to time with such
information as the Holder may reasonably request for purposes of the Holder’s
compliance with regulatory, accounting and reporting requirements applicable to
the Holder.

 
 

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SIGNATURE PAGE
 
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its officer, thereunto duly authorized as of the date of issuance set forth on
the first page hereof.

XENOGENICS CORPORATION
   
By:
     
Name:
W. Gerald Newmin
   
Title:
Chairman & CEO

 
 

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FORM OF SUBSCRIPTION

(To be signed only upon exercise of Warrant)
 
To:
 
¨
The undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, (1) See Below _________ (____ ) shares (the “Shares”) of Common
Stock of XENOGENICS CORPORATION and herewith makes payment of ______ Dollars
($______) therefor, and requests that the certificates for such shares be issued
in the name of, and delivered to,______, whose address is ________.

 
¨
The undersigned hereby elects to convert ______ percent (___%) of the value of
the Warrant pursuant to the provisions of Section 1(b) of the Warrant.

 
The undersigned acknowledges that it has reviewed the representations and
warranties contained in Section 17 of this Warrant and by its signature below
hereby makes such representations and warranties to the Company.
 
Dated
         
Holder:  
         
By:
         
Its:
         
(Address)
                   

 
(1)
Insert here the number of shares called for on the face of the Warrant (or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant, may be issuable upon
exercise.

 
 

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ASSIGNMENT
 
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth herein below, unto:
 
Name of Assignee
 
Address
 
No. of Shares
                   

 
Dated
         
Holder:
         
By:
         
Its:
   

 
 

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EXHIBIT “A”

[On letterhead of the Company]
 
Reference is hereby made to that certain Warrant dated , 2010, issued by
XENOGENICS CORPORATION, a Nevada corporation (the “Company”), to SILICON VALLEY
BANK (the “Holder”).
 
[IF APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the Warrant
that the following adjustment(s) have been made to the Warrant: [describe
adjustments, setting forth details regarding method of calculation and facts
upon which calculation is based].
 
This certifies that the Holder is entitled to purchase from the Company
_________(____) fully paid and nonassessable shares of the Company’s Common
Stock at a price of ______ Dollars ($______) per share (the “Stock Purchase
Price”). The Stock Purchase Price and the number of shares purchasable under the
Warrant remain subject to adjustment as provided in Section 4 of the Warrant.
 
Executed this ___ day of_______ , 20___.
 
XENOGENICS CORPORATION
     
By:
         
Name:
         
Title:
   

 
 

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