EXHIBIT 10.2
TARSA THERAPEUTICS, INC.

FIRST OMNIBUS AMENDMENT TO NOTE AND WARRANT PURCHASE
AGREEMENT, NOTES AND WARRANTS

This OMNIBUS AMENDMENT TO THE NOTE AND WARRANT PURCHASE AGREEMENT, NOTES AND
WARRANTS (this “Amendment”) is made and entered into this 8th day of April,
2011, by and among Tarsa Therapeutics, Inc., a Delaware corporation (the
“Company”), and Purchasers party to that certain Note Purchase Agreement dated
as of September 29, 2010, by and among the Company and the Purchasers named
therein (as amended, the “Purchase Agreement”).  Capitalized terms used and not
specifically defined herein shall have the meaning given to them in the
Agreement.

WHEREAS, pursuant to the Purchase Agreement, the Company has issued to the
Purchasers convertible promissory notes in the aggregate amount of $8,500,000
(each, an “Existing Note”) and warrants to purchase an aggregate of 899,800
shares Series A Preferred Stock (each, an “Existing Warrant”);
 
WHEREAS, Section 10(c) of the Purchase Agreement provides that any provision of
the Purchase Agreement may be amended, waived or modified upon the written
consent of the Company and the Required Purchasers;
 
WHEREAS, Section 9 of the Existing Notes provides that any provision of the
Existing Notes may be amended or waived upon the written consent of the Company
and the Required Purchasers;
 
WHEREAS, Section 10 of the Existing Warrants provides that any provision of the
Existing Warrants may be amended or waived upon the written consent of the
Company and the Required Purchasers;
 
WHEREAS, the undersigned Purchasers constitute the Required Purchasers; and
 
WHEREAS, the Company and the undersigned Purchasers desire to amend the Purchase
Agreement, each Existing Note and each Existing Warrant as set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants, agreements and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, each of the Company and the Purchasers agree as follows:
 
1.           Extension of Maturity Date.
 
(a)           Section 1 of each of the Existing Notes is hereby amended by
deleting the date “June 1, 2011” and inserting the date “March 31, 2012” in lieu
thereof.
 
(b)           Section 1 of the form of Note attached to the Purchase Agreement
as Exhibit A is hereby amended by deleting the date “June 1, 2011” and inserting
the date “March 31, 2012” in lieu thereof.
 
 
 

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2.           Subsequent Financings.  Section 2(b) of the Purchase Agreement is
hereby deleted in its entirety and the following inserted in lieu thereof:
 
(b)           “Subsequent Closings.

(i)           Subject to the pay-to-play and automatic conversion provisions of
Section 2(d), a subsequent sale and purchase of Notes (the “First Subsequent
Closing”) occurred on December 1, 2010 (the “First Subsequent Closing Date”)
pursuant to which the Purchasers purchased an aggregate of $5,000,000 Notes and
Warrants to purchase an aggregate of 529,294 Warrant Shares as follows:  (A)
each Purchaser delivered to the Company by check or wire transfer of immediately
available funds such Purchaser’s First Subsequent Loan Amount set forth opposite
each such Purchaser’s name under the heading “First Subsequent Loan Amount” on
the Schedule of Purchasers attached hereto (such Purchaser’s “First Subsequent
Loan Amount”), (B) the Company issued and delivered to each Purchaser a Note in
favor of such Purchaser in the corresponding principal amount equal to such
Purchaser’s First Subsequent Loan Amount and (C) the Company issued and
delivered to each Purchaser a Warrant exercisable for the number of Warrant
Shares set forth on Schedule I.

(ii)           Subject to the pay-to-play and automatic conversion provisions of
Section 2(d), subsequent sales and purchases of Notes in an amount not to exceed
$16,000,000 in the aggregate and Warrants to purchase an aggregate of up to
1,640,124 Warrant Shares shall occur in three subsequent closings (each, a
“Subsequent Closing” and, together with the First Subsequent Closing, the
“Subsequent Closings”).  Such Subsequent Closings currently are expected to be
in the following amounts and on or about the following dates: (i) $7,000,000 on
or about April 8, 2011, (ii) $6,000,000 on or about July 8, 2011, and (iii)
$3,000,000 on or about December 15, 2011; provided that the actual date and
amount of each Subsequent Closing shall be determined by the Required
Purchasers, in their sole discretion, including on any date prior to the
currently expected closing date.  Each Subsequent Closing shall be held at such
date and time as elected by the Required Purchasers, with at least 10 days prior
written notice to the Company and all Purchasers (each, a “Subsequent Closing
Date”).  At each Subsequent Closing, the Purchasers shall purchase Notes and
Warrants in the aggregate amounts as the Required Purchasers shall determine as
follows:  (i) each Purchaser shall deliver to the Company by check or wire
transfer of immediately available funds an amount equal to such Purchaser’s pro
rata share (determined in proportion to the outstanding vested shares of Common
Stock and Series A Preferred Stock on an as converted held by such Purchaser) of
the aggregate principal amount of all Notes to be purchased at each Subsequent
Closing and set forth opposite each such Purchaser’s name under the headings
“Second Subsequent Loan Amount,” “Third Subsequent Loan Amount” and “Fourth
Subsequent Loan Amount” on the Schedule of Purchasers attached hereto as
Schedule I, as amended from time to time in accordance with this Agreement (each
a Purchaser’s “Subsequent Loan Amount”), (ii) the Company shall issue and
deliver to each Purchaser a Note in favor of such Purchaser in the corresponding
principal amount equal to such Purchaser’s Subsequent Loan Amount and (iii) the
Company shall issue and deliver to each Purchaser a Warrant in favor of such
Purchaser which shall be exercisable for the number of Warrant Shares equal to
such Purchaser’s Subsequent Warrant Amount (as defined below) in accordance with
Section 2(e).  Each Subsequent Closing shall be made on the terms and conditions
set forth in this Agreement.  At each Subsequent Closing, the representations
and warranties of the Company in Section 3 hereof (and the Schedule of
Exceptions delivered to the Purchasers in the Initial Closing (the “Schedule of
Exceptions”) shall be deemed to speak as of the date of each Subsequent Closing
and the Company shall, if necessary and subject to the approval of the Required
Purchasers, update the Schedule of Exceptions as of each Subsequent
Closing.  The Initial Closing(s) and each Subsequent Closing are sometimes
referred to as the “Closing” and the Initial Closing Date and each Subsequent
Closing Date are sometimes referred to as the “Closing Date”.  In the event any
Purchaser fails to purchase the entire Subsequent Loan Amount for such
Subsequent Closing, any remaining Subsequent Loan Amount and the corresponding
Warrant Shares may be reallocated in such manner agreed to by the Company and
the Required Purchasers.”

 
 

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3.           Pay-to-Play and Automatic Conversion.
 
(a)             Section 2(d)(ii) of the Purchase Agreement is hereby deleted in
its entirety and the following inserted in lieu thereof:
 
“(ii) Immediately prior to the consummation of a Subsequent Closing under
Section 2(b)(i), the outstanding principal amount and accrued unpaid interest
under any Notes issued at the Initial Closing and held by any Defaulting
Purchaser shall automatically, and without any further action on the part of
such Purchaser or the Company, be converted into fully paid and non-assessable
shares of Common Stock (as defined below) at a conversion price equal to the
Applicable Conversion Price (as defined in the Charter) of the Series A
Preferred (as defined below) in effect at such time (such Applicable Conversion
Price being $1.00 as of the Effective Date).”
 
(b)             The following new Section 2(d)(iii) is hereby added to the
Purchase Agreement:
 
“(iii) Immediately prior to the consummation of a Subsequent Closing under
Section 2(b)(ii), the outstanding principal amount and accrued unpaid interest
under any Notes issued at any prior Subsequent Closing under Section 2(b)(ii)
and held by any Defaulting Purchaser shall automatically, and without any
further action on the part of such Purchaser or the Company, be converted into
fully paid and non-assessable shares of Common Stock (as defined below) at a
conversion price equal to the Applicable Conversion Price (as defined in the
Charter) of the Series A Preferred (as defined below) in effect at such time
(such Applicable Conversion Price being $1.00 as of the Effective Date).”
 
4.           New Purchasers.  Section 2(c) of the Purchase Agreement is hereby
deleted in its entirety and the following inserted in lieu thereof:
 
(c)           “Subsequent Loan Amounts.  This Agreement, including without
limitation the Schedule of Purchasers, may be amended by the Company with the
written consent of the Required Purchasers to (i) modify the aggregate amount of
Notes to be purchased at each Subsequent Closing, (ii) to allocate to each
Purchaser such Purchaser’s Subsequent Loan Amount in accordance with Section
2(b) and to modify the number of Warrant Shares issuable pursuant to the
Warrants issued at each Subsequent Closing in accordance with Section 2(e),
(iii) to reallocate any remaining Subsequent Loan Amount that was not purchased
in accordance with Section 2(b) and (iv) to add any Purchaser to the Schedule of
Purchasers who shall become a party to this Agreement by signing a counterpart
signature to this Agreement as a Purchaser.”
 
 
 

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5.             Representations and Warranties.
 
(a)             Section 3.7 of the Purchase Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
 
“Absence of Undisclosed Liabilities
 
6.           .  The Company has no liabilities of any nature, whether accrued,
absolute, contingent or otherwise (including without limitation liabilities as
guarantor or otherwise with respect to obligations of others, or liabilities for
taxes due or then accrued or to become due), except:  (a) liabilities stated or
adequately reserved against on the balance sheet provided to the Purchasers
dated as of February 28, 2011 or, with respect to any Subsequent Closing, the
balance sheet (in each case the “Balance Sheet”)  dated such later date and
provided to the Purchasers prior to such Subsequent Closing (the “Balance Sheet
Date”), (b) liabilities not in excess of $150,000 in the aggregate, incurred
since the date of the Balance Sheet in the ordinary course of business
consistent with past practices (none of which is a claim for breach of contract,
breach of duty, breach of warranty, tort, or infringement of an intellectual
property right), and (c) liabilities disclosed on Schedule 3.7 hereto.”
 
(b)             The opening paragraph of Section 3.8 is hereby deleted in its
entirety and the following inserted in lieu thereof:
 
“Conduct of Business; Absence of Certain Changes
 
7.           .  Except as disclosed on Schedule 3.8, since the Balance Sheet
Date, the Company has conducted its business only in the ordinary course of
business, consistent with prior practices and, whether or not in the ordinary
course of business, there has not been any change in the financial condition,
including working capital, earnings, reserves, properties, assets, liabilities,
business or operations, of the Company which change, by itself or in conjunction
with all other such changes, whether or not arising in the ordinary course of
business has, or would reasonably be expected to have, a Material Adverse
Effect.  Without limiting the generality of the foregoing, except as disclosed
on Schedule 3.8 hereto, since the Balance Sheet Date, there has not been:”
 
(c)             Section 3.17 of the Purchase Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
 
“Employees and Consultants.  Except as set forth on Schedule 3.17, there are no
currently effective consulting or employment agreements with individual
consultants or employees to which the Company is a party or which the Company is
a beneficiary (including non-competition covenants).  Also set forth on Schedule
3.17 is a list of the names of the employees, consultants and other individuals
who received compensation from the Company in excess of $100,000 for the fiscal
year ended December 31, 2010 or are anticipated to receive compensation in
excess of $100,000 for the fiscal year ending December 31, 2011, together with
the title or job classification of each such person and the total annual
compensation anticipated to be paid to each such person by the Company and its
subsidiaries commencing on the date hereof.  Each former and current employee
and consultant has executed and delivered an agreement relating to
confidentiality, non competition and invention assignment substantially in the
form attached as Exhibit E hereto.”
 
(d)             Section 3.19 of the Purchase Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
 
 
 

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 “Financial Statements
 
8.           .  Schedule 3.19 contains a complete and correct copy of the
audited financial statements for the fiscal year ended December 31, 2010, the
unaudited Balance Sheet as of the Balance Sheet Date (the “Interim Balance
Sheet”) and the unaudited Statements of Operation, Stockholders’ Equity and Cash
Flows for the period ended as of the Balance Sheet Date (collectively, the
“Financial Statements”).  The Financial Statements comport with the books and
records of the Company, present fairly and accurately the financial condition
and results of operations of the Company, at the dates and for the periods
indicated, and have been prepared in accordance with GAAP consistently applied,
except that the unaudited Financial Statements may not be in accordance with
GAAP because of the absence of footnotes normally contained therein and are
subject to normal year-end audit adjustments which individually or in the
aggregate will not be material.  Since the date of the Interim Balance Sheet,
the Issuer has not incurred any obligation (or series of related obligations) or
liability, contingent or otherwise, in excess of $50,000, except as set forth on
Schedule 3.19.”
 
(e)             The following new Section 3.27(f) is added the Purchase
Agreement:
 
“(f)           The results of the Company's Phase III oral calcitonin clinical
trial (the "Study"), including each of the Study's three treatment segments
(i.e., placebo, oral, nasal), were properly released and are accurately
represented in the data analysis delivered by the Company to the
Purchasers.  The Company has no Knowledge of any facts or circumstances that are
inconsistent with, or otherwise call into question, such results.”

6.           Amendment to Warrants. Sections 3.1, 3.3 and 3.4 of each of the
Existing Warrants and the form of Warrant attached to the Purchase Agreement is
hereby deleted in its entirety and the following inserted in lieu thereof:
 
“3.1           Subdivision, Consolidation, Reclassification or Change in Common
Stock.  In the event of any subdivision, consolidation, reclassification or
change of the Common Stock into a greater or lesser number or different class or
classes of stock, the number of shares of Common Stock deliverable upon
conversion of the Warrant Stock issuable upon exercise of this Warrant shall be
determined in accordance with the terms of Section 2(d)(v) of the Restated
Certificate of Incorporation of the Company.”
 
“3.3           Dividends or Other Distributions.  In the event that the Company
issues additional shares of Common Stock as a dividend or other distribution
with respect to the Common Stock, the number of shares of Common Stock
deliverable upon conversion of the Warrant Stock issuable upon exercise of this
Warrant shall be determined in accordance with the terms of Section 2(d)(v) of
the Restated Certificate of Incorporation of the Company.”
 
“3.4           Reorganizations.  If there shall occur any capital reorganization
of the Common Stock or the Warrant Stock (excluding mergers and consolidations
covered under Section 3.5 hereto and other than a subdivision, combination,
reclassification or change in par value), then, as part of any such
reorganization, lawful provision shall be made so that the Holder shall have the
right thereafter to receive upon the exercise of this Warrant the kind and
amount of shares of stock or other securities or property which such Holder
would have been entitled to receive if, immediately prior to any such
reorganization, such Holder had held the number of shares of (a) Common Stock
deliverable upon conversion of the Warrant Stock or (b) Warrant Stock, as the
case may be, which were then purchasable upon the exercise of this Warrant.  In
any such case, appropriate adjustment (as reasonably determined by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the Holder
such that the provisions set forth in this Section 3 (including provisions with
respect to adjustment of the Purchase Price) shall thereafter be applicable, as
nearly as is reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this
Warrant.”
 
 
 

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7.           Amendment to Schedule I.  Schedule I to the Purchase Agreement is
hereby amended in its entirety as set forth on Exhibit A attached hereto.
 
8.           Effect of this Amendment.  Except as specifically amended as set
forth herein, each term and condition of the Purchase Agreement and the Notes
shall continue in full force and effect.
 
9.           Counterparts; Facsimile Signatures.  This Amendment may be executed
or consented to in counterparts, each of which shall be deemed an original and
all of which taken together shall constitute one and the same instrument.  This
Amendment may be executed and delivered by facsimile or electronically and, upon
such delivery, the facsimile or electronically transmitted signature will be
deemed to have the same effect as if the original signature had been delivered
to the other party.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 

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The parties have caused this Amendment to be duly executed and delivered by
their proper and duly authorized officers as of the date and year first written
above.
 

  COMPANY:             TARSA THERAPEUTICS, INC.                  
 
By:
/s/        Name:  David Brand       Title:  President and Chief Executive
Officer  

 
[Counterpart Signature Pages Begin on Next Page]
 
 
 

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Counterpart Signature Page For Purchasers
 
IN WITNESS WHEREOF, the parties have executed this Note and Warrant Purchase
Agreement as of the date first written above.
 

 
SIGNED by MVM LIFE SCIENCE
    PARTNERS LLP for and on     behalf of MVM FUND III LIMITED     PARTNERSHIP
acting by two of its members:              
 
Name:
    Title:    Member                 Name:     Title:    Member           SIGNED
by MVM LIFE SCIENCE     PARTNERS LLP for and on     behalf of MVM FUND III
(NO.2) LIMITED     PARTNERSHIP acting by two of its members:                
Name:     Title:    Member                 Name:     Title:    Member  

 
 
 

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Counterpart Signature Page For Purchasers
 
           IN WITNESS WHEREOF, the parties have executed this Note and Warrant
Purchase Agreement as of the date first written above.
 

 
QUAKER BIOVENTURES II, L.P.
                    By:  QUAKER BIOVENTURES CAPITAL II,     L.P., its General
Partner                     By:  QUAKER BIOVENTURES CAPITAL II,     LLC, its
General Partner              
 
By:
        Name:  Matthew B. Rieke       Title:    Vice President  

 
 
 

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Counterpart Signature Page For Purchasers
 
IN WITNESS WHEREOF, the parties have executed this Note and Warrant Purchase
Agreement as of the date first written above.
 

  NOVO A/S                  
 
By:
        Name:  Martin W. Edwards       Title:    Senior Partner  

 
 
 

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Counterpart Signature Page For Purchasers
 
IN WITNESS WHEREOF, the parties have executed this Note and Warrant Purchase
Agreement as of the date first written above.
 

     
 
      David Brand  

 
 
 

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Counterpart Signature Page For Purchasers
 
IN WITNESS WHEREOF, the parties have executed this Note and Warrant Purchase
Agreement as of the date first written above.
 

 
UNIGENE LABORATORIES, INC.
                 
 
By:
        Name:       Title:  

 
 
 

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Counterpart Signature Page For Purchasers
 
IN WITNESS WHEREOF, the parties have executed this Note and Warrant Purchase
Agreement as of the date first written above.
 

           
Date
      James Gilligan  

 
 
 

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Exhibit A

Schedule I

SCHEDULE OF PURCHASERS

Name and Address of Purchaser
Initial Loan Amount
Warrant Shares to be Issued at Initial Closing
First Subsequent Loan Amount
Warrant Shares to be Issued at  First Subsequent Closing
Second Subsequent Loan Amount
Warrant Shares to be Issued at Second Subsequent Closing
Third Sub-sequent Loan Amount
Warrant Shares to be Issued at Third Subsequent Closing
Fourth Sub-sequent Loan Amount
Warrant Shares to be Issued at Fourth Subsequent Closing
MVM Fund III Limited Partnership
c/o MVM Life Science Partners
6 Henrietta Street
London, UK
WC2E 8PU
Attn: Hugo Harrod
Fax:  44-0-20-7557-7501
$911,536.98
91,154
$1,302,196.65
130,220
 
 
 
 
 
$1,644,436.44
 
 
 
 
 
168,059
$1,409,516.95
144,051
$704,758.48
72,025
MVM Fund III (No.2) Limited Partnership
c/o MVM Life Science Partners
6 Henrietta Street
London, UK
WC2E 8PU
 
Attn: Hugo Harrod
Fax:  44-0-20-7557-7501
$44,992.02
4,499
$64,274.35
6,427
$81,166.66
8,295
$69,571.42
7,110
$34,785.71
3,555
MVM Subtotal
 
$956,529
 
 
95,653
 
 
$1,366,471
 
 
136,647
 
 
$1,725,603.10
 
 
176,354
 
 
$1,479,088.37
 
 
151,161
 
 
$739,554.19
 
 
75,580
 
Quaker BioVentures II, L.P.
c/o Quaker BioVentures, L.P.
Cira Centre
2929 Arch Street
Philadelphia, PA
19104-2868
Attn: George T. Harris, III
Fax: 215-609-3351
$1,162,000
116,200
$1,660,000
166,000
$1,817,409.21
185,737
$1,557,779.32
159,203
$778,889.66
79,601
Novo A/S
Tuborg Havnevej 19
Hellerup
Denmark
DK2900
Attn. Heather Ludvigson
Fax. +45 3527 6510
$1,367,059
157,212
$1,952,941
224,588
$1,917,112.74
195,926
$1,643,239.49
167,937
$821,619.75
83,968
David Brand
7 Village Circle
Newtown Square, PA 19073
$14,412
1,441
$20,588
2,059
$6,562.50
 
656
 
$5,625.00
563
$2,812.50
281
James P. Gilligan
14 North Ridge Road
Denville, NJ 07834
-
-
-
-
$15,312.50
1,531
$13,125.00
1,313
$6,562.50
656
Unigene Laboratories
81 Fulton St
Boonton, NJ 07005 USA
-
-
-
-
$1,517,999.95
157,349
$1,301,142.81
134,871
$650,571.41
67,435
TOTAL:
 
$3,500,000
 
 
370,506
 
 
$5,000,000
 
 
529, 294
 
 
$7,000,000.00
 
 
717,554
 
 
$6,000,000.00
 
 
615,047
 
 
$3,000,000
 
 
307,523
 

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