Unassociated Document


    Exhibit
      10.5

     

    
      THIS
        PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
        AS
        AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH
        RULE
        144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
        OR AN
        OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH
        REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER
        FROM
        THE SECURITIES AND EXCHANGE COMMISSION.

       

      CONTRIBUTION
        PROMISSORY NOTE

       

      
        
          	
                  $16,545,596

                	
                  July
                    1, 2007

                
	 	
                  Bothell,
                    Washington

                


        

      

       

      For
        value
        received Plexera Bioscience LLC,
        a
        Delaware limited liability company (“Payor”
        or the “Company”)
        promises to pay to Lumera Corporation, a Delaware corporation, or
        its
        assigns (the “Holder”)
        the
        principal sum of $16,545,596 with interest on the outstanding principal amount
        at the rate of 8.0% per annum, compounded annually (the “Interest
        Rate”).
        Interest shall commence with the date hereof and shall continue on the
        outstanding principal until paid in full or converted. Interest shall be
        computed on the basis of a year of 365 days for the actual number of days
        elapsed.

      

        1.  Payment.
          All
          payments of interest and principal shall be in lawful money of the United
          States
          of America. All payments shall be applied first to accrued interest, and
          thereafter to principal.

         

        2.  Maturity.
          Unless
          this Note has been converted in accordance with the terms of Section 5
          below,
          the entire outstanding principal balance and all unpaid accrued interest
          shall
          become fully due and payable on July 1, 2010 (the “Maturity
          Date”).

         

        3.  Prepayment.
          This
          Note may not be prepaid, in whole or part, without the prior written consent
          of
          the Holder.

         

        4.  Conversion.

         

      

      
        (a)
            Conversion.
          If, at
          any time during which this Note remains outstanding and prior to the Maturity
          Date, the Company offers and issues (the "Offering"),
          a
          series of new equity securities in a Qualified Financing, then this Note,
          including any accrued but unpaid interest thereon, shall convert into equity
          securities of the Company upon closing of such Offering at a price per
          share
          equal to the price per share of the equity securities sold in such Offering
          and
          subject to the same rights, preferences, privileges and obligations attached
          to
          shares of the equity securities issued in the Offering at the time of such
          conversion. For
          purposes of this Note, a “Qualified
          Financing”
shall
          be either (a) a new investment of or a series of new investments that aggregate
          to at least [$5,000,000] cash by any person or entity (other than the members
          of
          the Company as of the date of this note) or (b) an initial public offering
          of
          securities of the Company registered under the Securities Act raising at
          least
          [$5,000,000].  

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

         

        (b)  Conversion
          Procedure.
          

         

        (i)
          Upon
          any conversion pursuant to Section 4(a), the Company shall take all measures
          necessary or appropriate to permit such conversion to occur as promptly
          as
          practicable and otherwise comply with all of its obligations hereunder,
          including, but not limited to, (A) calling a special meeting of the Board
          of
          Directors and/or stockholders of the Company to authorize an amendment
          to the
          Company’s Certificate of Incorporation authorizing the applicable class or
          series of Company capital stock issuable upon conversion of the Note and,
          if
          necessary, the additional capital stock issuable upon conversion of the
          aforementioned capital stock, (B) filing such amendment with the Secretary
          of
          State of the State of Delaware, and (C) taking any other action necessary
          or appropriate to consummate the transactions contemplated hereby and to
          permit
          the conversion to occur as promptly as practicable. If at any time the
          number of
          authorized but unissued shares of Company capital stock are insufficient
          to
          permit the conversions contemplated by this Section 4, the Company shall
          take
          such actions as may be necessary to increase the Company’s authorized,
          unreserved and unissued shares of the applicable class or series of capital
          stock to such number of shares as shall be sufficient for such conversion.
          Upon
          delivery, all shares issued pursuant to this Section 4 shall be duly and
          validly
          issued, fully paid and non-assessable.

         

        (ii)
           No
          fractional shares or interest of capital stock of the Company, or scrip
          representing fractional shares or interests, shall be issued upon conversion
          of
          the Note pursuant to this Section 4. Any principal amount and accrued but
          unpaid
          interest not converted into the capital stock because of the restrictions
          of the
          preceding sentence shall be paid by the Company to the Holder in immediately
          available funds on the date of the conversion. If this Note is converted
          into
          capital stock of the Company, this Note shall be treated by the Company
          as
          surrendered for cancellation and exchanged into such capital stock and
          this Note
          will be deemed, for all purposes, to be canceled on the books of the Company
          and
          the obligation represented by this Note so terminated. The Company shall,
          as
          soon as practicable after receipt of this Note marked cancelled, issue
          and
          deliver to the Holder at its designated address a certificate or certificates
          for the number of shares of capital stock to which the Holder shall be
          entitled
          upon such conversion (bearing such legends as are required by applicable
          state
          and Federal securities laws in the opinion of counsel to the Company),
          together
          with immediately available funds payable to the Holder for any cash amounts
          payable as described in this clause (ii). 

         

        5.  Liquidity
          Event.
          If the
          Company shall determine to engage in any transaction which would result
          in a
          Liquidity Event (defined below) at any time while this Note remains outstanding,
          the Company shall deliver to the Holder written notice thereof (the
“Company
          Liquidity Notice”),
          including a summary of the material terms of such Liquidity Event to the
          Holder
          not less than 15 days prior to the consummation of such Liquidity Event
          (or such
          shorter period as may be approved by the Holder). Upon the consummation
          of a
          Liquidity Event and delivery by the Holder of this Note, the Holder may
          direct
          the Company to pay the Holder, in cash, an amount equal to the outstanding
          principal amount of this Note, plus accrued but unpaid interest thereon
          or to
          convert this Note into equity securities in accordance with Section
          4(a). The
          term
“Liquidity
          Event”
means
          the consummation of a sale of all or substantially all of the assets of
          the
          Company, or a consolidation or merger of the Company, or other transaction
          or
          series of related transactions, in either case resulting in the disposition
          of
          more than fifty percent (50%) of the voting power of the Company; provided,
          however,
          that a
          Qualified Financing shall not, in any event, be deemed to be a Liquidity
          Event.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        6.  Events
          of Default.
          For
          purposes of this Note, “LIBOR” shall mean the London Inter Bank Offered Rate. If
          there shall be any Event of Default hereunder upon the declaration of the
          Holder, at the option of the Holder and upon written notice to the Payor,
          this
          Note shall (a) remain outstanding, and the Interest Rate shall increase
          (subject
          to applicable law) to LIBOR plus
          8%,
          compounded annually, (b) accelerate, in which case all principal and unpaid
          accrued interest shall become due and payable, or (c) if a Qualified Financing
          has occurred, convert into equity securities in accordance with Section
          4. The
          occurrence of any one or more of the following shall constitute an “Event
          of Default”:

         

        (a)  Payor
          fails to pay timely any of the principal amount due under this Note on
          the date
          the same becomes due and payable or any accrued interest or other amounts
          due
          under this Note on the date the same becomes due and payable;

         

        (b)  Payor
          defaults in its performance of any covenant under the Intercompany Services
          Agreement, effective as of July 1, 2007, by and between Payor and the
          Holder;

         

        (c)  Payor
          files any petition or action for relief under any bankruptcy, reorganization,
          insolvency or moratorium law or any other law for the relief of, or relating
          to,
          debtors, now or hereafter in effect, or makes any assignment for the benefit
          of
          creditors or takes any corporate action in furtherance of any of the foregoing;
          

         

        (d)  An
          involuntary petition is filed against Payor (unless such petition is dismissed
          or discharged within 60 days) under any bankruptcy statute now or hereafter
          in
          effect, or a custodian, receiver, trustee, assignee for the benefit of
          creditors
          (or other similar official) is appointed to take possession, custody or
          control
          of any property of Payor; or

         

        (e)  Default
          in payment of indebtedness for money borrowed in excess of $500,000 that
          gives
          the holder of that debt the right to accelerate payment. 

         

        7.  Costs.
          In the
          event of any default hereunder, Payor shall pay all reasonable attorneys’ fees
          and court costs incurred by the Holder in enforcing and collecting this
          Note.

         

        8.  Waiver
          of Demand.
          Payor
          hereby waives demand, notice, presentment, protest and notice of
          dishonor.

         

        9.  Governing
          Law.
          This
          Note shall be governed by and construed under the laws of the State of
          Delaware
          as such laws are applied to agreements among Delaware residents entered
          into and
          performed entirely within the State of Delaware, without reference to the
          conflict of laws provisions thereof. 

         

        10.  Seniority.
          The
          indebtedness evidenced by this Note is senior in right of payment to all
          of the
          Company’s other indebtedness for money borrowed after the date hereof.


         

        11.  Amendment
          and Waiver.
          Any
          term of this Note may be amended or waived with the written consent of
          Payor and
          the Holder. 

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        12.  Notices.
          All
          notices and other communications provided for herein shall be in writing
          and
          shall be deemed to have been duly given, delivered and received: (a) upon
          personal delivery to the party to be notified, (b) when sent by confirmed
          telex, electronic mail or facsimile if sent during normal business hours
          of the
          recipient, if not, then on the next business day, (c)  5 days after having
          been sent by registered or certified mail, return receipt requested, postage
          prepaid, or (d) 1 day after deposit with a nationally recognized overnight
          courier, specifying next day delivery, with written verification of receipt.
          

      

       

      
        	
              	(a)	
                If
                  to the Holder:

              


      

       

      19910
        North Creek Parkway

      Bothell,
        Washington 98011

      (425)
        415-6900

      Attention:
        Chief Financial Officer

       

      
        	
              	(b)	
                If
                  to the Company:

              


      

       

      
        
          
            19910
              North Creek Parkway

            Bothell,
              Washington 98011

            (425)
              415-6900

            Attention:
              Chief Financial Officer

          

           

          with
            a
            copy to:

           

          Ropes
            & Gray LLP

          One
            International Place

          Boston,
            MA 02110

          Attn: Christopher
            A. Austin, Esq.

          Fax: (617)
            951-7000

           

        

      

      
        13.  Transfers.
          This
          Note, and all rights hereunder, are transferable, in whole or in part by
          the
          Holder thereof.

        

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

        

         

      

      IN
        WITNESS WHEREOF, the Company has executed this Note as of the date first
        written
        above.

       

      
        	 	 	 
	 	Plexera Bioscience
                LLC
	 
 	 
 	 
 
	 	By:  	___________________________________
	 	Name:	___________________________________
	 	Title:	___________________________________


      

       

      
        [Signature
          Page to Contribution Note]