Document:

Exhibit 4.4

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

PROMISSORY NOTE

 

	
  $4,590,600.47

  	
   

  	
  February 18, 2005

  
	
   

  	
   

  	
  Boulder, Colorado

  

 

FOR VALUE RECEIVED,
TAPESTRY PHARMACEUTICALS, INC., a
Delaware corporation formerly known as NaPro BioTherapeutics, Inc. (the “Company”), hereby
promises to pay to TL VENTURES V L.P.
or registered assigns (“Holder”),
in lawful money of the United States of America, the principal sum of Four
Million Five Hundred Ninety Thousand Six Hundred and Forty-seven One Hundredths
Dollars ($4,590,600.47), on the dates and in the amounts set forth below.  This Note shall not bear interest, except as
expressly provided below.

 

1.         Principal Payments. 
The outstanding principal amount of the Loan shall be paid on the dates
and in the amounts stated below.

 

	
  Repayment
  Date

  	
   

  	
  Repayment Amount

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2005 beginning in February

  	
   

  	
  $

  	
  49,149.90

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2006

  	
   

  	
  $

  	
  108,129.78

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2007

  	
   

  	
  $

  	
  147,449.69

  
	
   

  	
   

  	
   

  
	
  January 31, 2008

  	
   

  	
  $

  	
  982,997.93

  

 

2.         Default.

 

2.1          A
“Default”
occurs if (a) the Company defaults in the payment when due of any principal on
this Note and such default continues for a period of fifteen (15) days after
written notice thereof has been given by the Holder to the Company as provided
herein, (b) the Company fails (i) to maintain its corporate existence and
remain in good standing under the laws of the State of Delaware or (ii) to
timely pay any Taxes relating to the Company or its business as such Taxes
become due and payable (except such as are being contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holder), and, in the case of clauses (i)
and (ii), such failure continues for a period of thirty (30) days after written
notice thereof has been given to the Company or (c) the

 

1

 

Company breaches any of the covenants contained in Sections 6, 7 or 8
of this Note, and such breach continues for a period of thirty (30) days after
written notice thereof has been given to the Company.  The Company shall notify the Holder of any
event that with the giving of notice and the passage of time would constitute a
Default under subsections (b) or (c) of this Section 2.1 of which it is aware
as soon as practicable and, in any event, no later than five (5) days after the
Company becomes aware of such event.

 

2.2          Upon
the occurrence and during the continuation of a Default, interest on the unpaid
balance of the Notes shall accrue at a rate of ten percent (10%) simple
interest per annum.

 

2.3          A
Default under Section 2.1(a) is cured when the Company has paid all interest
accrued under this Section 2 and has made all principal payments due prior to
the date thereof.

 

3.         Continuing Default.

 

3.1          A
“Continuing Default”
occurs

 

(a)           If
the Company fails to be current in the payment of principal and interest for a
continuous period of six (6) months after the occurrence of a Default that has
not been cured and such failure continues for a period of fifteen (15) days
after written notice thereof has been given by Holder to the Company as
provided herein;

 

(b)           If
a Default occurs for a third time (two Defaults have occurred previously and
been cured by the Company) and the continuation of such Default for a period of
fifteen (15) day after written notice thereof has been given by Holder to the
Company as provided herein;

 

(c)           If
the Company shall default in the payment of principal or interest due and owing
under any agreement relating to Company Indebtedness (as defined below) other
than Partner Indebtedness (as defined below) beyond any period of grace provided
with respect thereto or in the performance or observance of any other
agreement, term or condition contained in any agreement under which such
obligation is created, if the principal amount due and payable on such Company
Indebtedness exceeds $1,000,000 and the effect of such default is to cause such
Company Indebtedness to become due prior to its stated maturity; or

 

(d)           If
(i) a court having jurisdiction in the premises enters a decree or order for
relief in respect of the Company in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrate
(or similar official) of the Company or for any substantial part of the
property of the Company or ordering the winding up or liquidation of the
affairs of the Company, and such decree or order remains unstayed and in effect
for a period of sixty (60) consecutive days or (ii) the Company commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrate
(or similar official) of the Company or for any substantial part of the
property of the Company, or the Company makes any general assignment for the
benefit of creditors.

 

2

 

3.2          Upon
the occurrence and during the continuation of a Continuing Default, the Holder
may declare the entire principal amount of this Note and any interest accrued
thereon to be due and payable immediately by giving written notice thereof to
the Company as provided herein, and upon any such declaration the same shall be
immediately due and payable.  Any demand
for payment may be rescinded and annulled by the Holder at any time prior to
payment hereunder.  No such rescission or
annulment shall affect any subsequent Default or Continuing Default or impair
any right consequent thereon.

 

4.         Application of Payments; Prepayments.

 

4.1          If
any amounts are then due hereunder, payments on this Note shall be applied
first to interest, if any, and then to any principal that is past due hereunder.

 

4.2          The
Company may prepay the Notes, in whole or in part, at any time by giving ten
(10) days written notice thereof to the Holder.

 

(a)           The
amount necessary to prepay all or any portion of the Notes shall be equal to
the net present value of the amount to be prepaid, discounted at a rate of four
percent (4%) per annum.

 

(b)           The
Company may designate in its notice of prepayment given to the Holder the
scheduled principal payment or payments to which such prepayment shall be
applied.  In the absence of such a
designation, the prepayment shall be applied to the principal payment or
payments next due.

 

5.         Place of Payment. 
All amounts payable hereunder shall be payable to the Holder by a check
issued by the Company to the Holder and delivered to the Holder at its office
at TL Ventures V L.P., 435 Devon Park Drive, 700 Building, Wayne, PA  19087, or by wire transfer to the following
account: Comerica Bank, San Jose, CA, ABA #121-137-552, for the account of TL
Ventures V L.P., A/C # 1891668863.  The
Holder may direct that payment be made to another office or account by giving
written notice thereof to the Company as provided herein at least five (5) days
before the payment is to be made.

 

6.         Rank; Additional Indebtedness; Liens.

 

6.1          Obligations
under this Note, including payments of principal and interest and other
payments due under this Note, (i) shall rank pari
passu in bankruptcy with all Permitted Senior Indebtedness (as
defined below) and (ii) shall be senior to all Permitted Subordinated
Indebtedness (as defined below).

 

6.2          So
long as this Note is outstanding, the Company shall not, directly or
indirectly, incur or guarantee, assume or suffer to exist any Company
Indebtedness, other than (i) the Indebtedness evidenced by this Note, (ii)
Permitted Senior Indebtedness, and (iii) Permitted Subordinated Indebtedness.

 

6.3          So long as this Note is outstanding,
the Company shall not, directly or indirectly, allow or suffer to exist any
Lien upon or in any property or assets (including accounts and contract rights)
owned by the Company, except for Permitted Liens (as defined below).

 

3

 

7.         Dividends; Redemption of Equity; Etc.  The Company hereby covenants and agrees that
it will not, directly or indirectly, declare or pay any dividend or other
distribution in respect of any class of its outstanding capital stock, or make
any payment to redeem, purchase or otherwise acquire, or call for redemption,
any of such stock, except for (a) dividends or other distributions in respect
of any series of preferred stock of the Company issued after the date hereof,
provided that no Continuing Default exists, (b) purchases or redemptions of
capital stock of the Company for which the consideration paid, in the
aggregate, does not exceed fifty percent (50%) of the net proceeds received by
the Company from the issuance of capital stock by the Company after the date
hereof, (c) purchases or redemptions of shares of common stock of the Company (“Common Stock”), which
purchases or redemptions, in the aggregate, do not exceed ten percent (10%) of
the number of shares of Common Stock that are issued and outstanding as of the
date hereof, and (d) dividends or distributions payable solely in shares of
Common Stock or in warrants or other rights to acquire Common Stock.

 

8.         Noncircumvention.  The Company hereby
covenants and agrees that it will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or other voluntary action,
other than as contemplated by the terms of this Note, avoid or seek to avoid
the performance of any of the terms of this Note, and will at all times in good
faith carry out all of the provisions of this Note.  The consequences of actions taken by the
Company in the conduct of its business in good faith shall not be deemed to
constitute a breach or default of this Section 8.

 

9.         Mutilated, Defaced, Destroyed, Lost and Stolen Notes.  In case any temporary or definitive Note
shall become mutilated, defaced or be apparently destroyed, lost or stolen, the
Company shall execute and deliver a new Note in exchange and substitution for
the mutilated or defaced Note or in substitution for the apparently destroyed,
lost or stolen Note.  In the case that a
Note has been destroyed, lost or stolen, the Holder shall furnish to the
Company such security or indemnity as the Company may reasonably require to
indemnify and defend and to save the Company harmless from all risks, and shall
also furnish to the Company evidence to the Company’s reasonable satisfaction
of the apparent destruction, loss or theft of such Note and of the ownership
thereof.

 

10.       Certain Definitions.

 

10.1        “Acquisition Indebtedness”
shall mean Company Indebtedness for which the Company becomes obligated in
connection with the acquisition by the Company of the business or assets of
another person or as a result of the merger or consolidation of the Company
with another person, which indebtedness was an obligation of such other person
that existed at the time of such acquisition, merger or consolidation and was
not incurred in connection with or in anticipation of such acquisition, merger
or consolidation.

 

10.2        “Company Indebtedness”
shall mean (a) all obligations of the Company for borrowed money, (b) all
obligations of the Company evidenced by bonds, debentures, notes or other
similar instruments (including, without limitation, any seller notes, deferred
purchase price obligations or earnout obligations issued or entered into in
connection with any acquisition undertaken by the Company), (c) all obligations
in respect of letters of credit, to the extent

 

4

 

drawn, and bankers’ acceptances issued for the account of the Company
and (d) any accrued interest, prepayment premiums or penalties related to any
of the foregoing.

 

10.3        “Liens” shall mean any
mortgage, pledge, security interest, conditional sale or other title retention
agreement, encumbrance, lien, easement, option, debt, charge, claim or
restriction of any kind.

 

10.4        “Partner Indebtedness” shall mean any Company
Indebtedness assumed or incurred in connection with a bona fide transaction
with a third party which involves a license, development, or marketing agreement,
establishment of a joint venture, or the purchase of assets or stock from such
third party, merger with a third party, or any other similar transaction.

 

10.5        “Permitted Liens”
shall mean (a) Liens imposed by law, such as mechanics’, materialmens’,
carriers’, workmens’, repairmens’, contractors’ Liens arising or incurred in
the ordinary course of business and securing payment of obligations that are
not more than 60 days past due or are being contested in good faith and by
appropriate proceedings, (b) easements, rights-of-way, restrictions and other
similar charges and encumbrances of record not interfering materially with the
ordinary conduct of the business of the Company or detracting materially from
the use, occupancy, value or marketability of title of the assets subject
thereto, (c) Liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting, (d) purchase money Liens securing rental payments under
capital lease arrangements, (e) purchase money Liens secured solely by the
property purchased and (f) other Liens arising in the ordinary course of
business and not incurred in connection with the borrowing of money.

 

10.6        “Permitted Senior Indebtedness”
shall mean any Company Indebtedness that ranks pari
passu in bankruptcy to the Company Indebtedness evidenced by this
Note and, other than restrictions contained in Acquisition Indebtedness that
were not put in place in connection with or in anticipation of the acquisition,
merger or consolidation giving rise to the incurrence of such Acquisition
Indebtedness by the Company, that does not contractually prohibit the Company
from making any payments to the Holder pursuant to this Note.

 

10.7        “Permitted Subordinated Indebtedness”
shall mean any Company Indebtedness that is subordinate in right of payment to
the Company Indebtedness evidenced by this Note and, other than restrictions
contained in Acquisition Indebtedness that were not put in place in connection
with or in anticipation of the acquisition, merger or consolidation giving rise
to the incurrence of such Acquisition Indebtedness by the Company, that does
not contractually prohibit the Company from making any payments to the Holder
pursuant to this Note.

 

10.8        “Taxes” shall mean any
foreign, federal, state or local income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer, real property gains,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties or additions to tax or
additional amounts in respect of the foregoing.

 

5

 

11.       Notices.  Any
notices required or permitted to be given under the terms of this Note shall be
in writing and shall be deemed to have been delivered (a) upon receipt, when
delivered personally, or (b) one (1) business day after deposit with a
nationally recognized overnight courier, in each case properly addressed to the
party to receive the same.  The addresses
for such notices shall be:  If to the
Company:  Tapestry Pharmaceuticals, Inc.,
4840 Pearl East Circle, Suite 300W, Boulder, Colorado  80301, Attention: Chief Financial Officer,
with a copy to Tapestry Pharmaceuticals, Inc., 4840 Pearl East Circle, Suite
300W, Boulder, Colorado  80301,
Attention: General Counsel; and if to the Holder: TL Ventures V L.P., 435 Devon
Park Drive, 700 Building, Wayne, Pennsylvania 
19087.  The Company and the Holder
shall provide written notice to the other in accordance with the provisions
hereof of any change in the address to which it desires notice to be given.

 

12.       Governing Law. 
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction.  Each party hereby irrevocably submits to the
nonexclusive jurisdiction of the state and federal courts sitting in the State
of Delaware, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, or that such suit, action or proceeding is improper.  The parties hereto, including all guarantors
or endorsers, hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance
and enforcement of this Note, except as specifically provided herein, and
assent to extensions of the time of payment, or forbearance or other indulgence
without notice.

 

13.       Waiver of Jury Trial. 
Each party hereby expressly waives, to the fullest extent permitted by
law, the right to a trial by jury in any action or proceeding brought with
respect to any dispute, controversy or claim arising out of or relating in any
way to this Note or the interpretation, breach, termination or invalidity
thereof, or the transactions contemplated thereby.  This Note may be submitted in any such
proceeding to evidence the foregoing waiver.

 

14.       Successors and Assigns. 
The provisions of this Note shall inure to the benefit of and be binding
on any successor to the Company and shall extend to any Holder hereof.

 

6

 

IN WITNESS WHEREOF,
the Company has caused this instrument to be duly executed on the date set
forth above.

 

	
   

  	
  TAPESTRY PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kai Pace Larson

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  Kai Pace Larson

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President, General Counsel

  	
   

  
							

 

7Exhibit 4.5

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

PROMISSORY
NOTE

 

	
  $79,399.53

  	
   

  	
  February 18, 2005

  
	
   

  	
   

  	
  Boulder, Colorado

  

 

FOR VALUE RECEIVED,
TAPESTRY PHARMACEUTICALS, INC., a
Delaware corporation formerly known as NaPro BioTherapeutics, Inc. (the “Company”), hereby
promises to pay to TL VENTURES V INTERFUND
L.P. or registered assigns (“Holder”), in lawful money of the United
States of America, the principal sum of Seventy-nine Thousand Three Hundred
Ninety-nine and Fifty-three One Hundredth Dollars ($79,399.53), on the dates
and in the amounts set forth below.  This
Note shall not bear interest, except as expressly provided below.

 

1.         Principal Payments.  The outstanding principal amount of the Loan
shall be paid on the dates and in the amounts stated below.

 

	
  Repayment
  Date

  	
   

  	
  Repayment Amount

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2005 beginning in February

  	
   

  	
  $

  	
  850.10

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2006

  	
   

  	
  $

  	
  1,870.22

  
	
   

  	
   

  	
   

  
	
  Last business day of each month in 2007

  	
   

  	
  $

  	
  2,550.31

  
	
   

  	
   

  	
   

  
	
  January 31, 2008

  	
   

  	
  $

  	
  17,002.07

  
					

 

2.         Default.

 

2.1          A
“Default”
occurs if (a) the Company defaults in the payment when due of any principal on
this Note and such default continues for a period of fifteen (15) days after
written notice thereof has been given by the Holder to the Company as provided
herein, (b) the Company fails (i) to maintain its corporate existence and
remain in good standing under the laws of the State of Delaware or (ii) to
timely pay any Taxes relating to the Company or its business as such Taxes
become due and payable (except such as are being contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holder), and, in the case of clauses (i)
and (ii), such failure continues for a period of thirty (30) days after written
notice thereof has been given to the Company or (c) the

 

1

 

Company breaches any of the covenants contained in Sections 6, 7 or 8
of this Note, and such breach continues for a period of thirty (30) days after
written notice thereof has been given to the Company.  The Company shall notify the Holder of any
event that with the giving of notice and the passage of time would constitute a
Default under subsections (b) or (c) of this Section 2.1 of which it is aware
as soon as practicable and, in any event, no later than five (5) days after the
Company becomes aware of such event.

 

2.2          Upon
the occurrence and during the continuation of a Default, interest on the unpaid
balance of the Notes shall accrue at a rate of ten percent (10%) simple
interest per annum.

 

2.3          A
Default under Section 2.1(a) is cured when the Company has paid all interest
accrued under this Section 2 and has made all principal payments due prior to
the date thereof.

 

3.         Continuing Default.

 

3.1          A
“Continuing Default”
occurs

 

(a)           If
the Company fails to be current in the payment of principal and interest for a
continuous period of six (6) months after the occurrence of a Default that has
not been cured and such failure continues for a period of fifteen (15) days
after written notice thereof has been given by Holder to the Company as
provided herein;

 

(b)           If
a Default occurs for a third time (two Defaults have occurred previously and
been cured by the Company) and the continuation of such Default for a period of
fifteen (15) day after written notice thereof has been given by Holder to the
Company as provided herein;

 

(c)           If
the Company shall default in the payment of principal or interest due and owing
under any agreement relating to Company Indebtedness (as defined below) other
than Partner Indebtedness (as defined below) beyond any period of grace provided
with respect thereto or in the performance or observance of any other
agreement, term or condition contained in any agreement under which such
obligation is created, if the principal amount due and payable on such Company
Indebtedness exceeds $1,000,000 and the effect of such default is to cause such
Company Indebtedness to become due prior to its stated maturity; or

 

(d)           If
(i) a court having jurisdiction in the premises enters a decree or order for
relief in respect of the Company in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrate
(or similar official) of the Company or for any substantial part of the
property of the Company or ordering the winding up or liquidation of the
affairs of the Company, and such decree or order remains unstayed and in effect
for a period of sixty (60) consecutive days or (ii) the Company commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrate
(or similar official) of the Company or for any substantial part of the
property of the Company, or the Company makes any general assignment for the
benefit of creditors.

 

2

 

3.2          Upon
the occurrence and during the continuation of a Continuing Default, the Holder
may declare the entire principal amount of this Note and any interest accrued
thereon to be due and payable immediately by giving written notice thereof to
the Company as provided herein, and upon any such declaration the same shall be
immediately due and payable.  Any demand
for payment may be rescinded and annulled by the Holder at any time prior to
payment hereunder.  No such rescission or
annulment shall affect any subsequent Default or Continuing Default or impair
any right consequent thereon.

 

4.         Application of Payments; Prepayments.

 

4.1          If
any amounts are then due hereunder, payments on this Note shall be applied
first to interest, if any, and then to any principal that is past due
hereunder.

 

4.2          The
Company may prepay the Notes, in whole or in part, at any time by giving ten
(10) days written notice thereof to the Holder.

 

(a)           The
amount necessary to prepay all or any portion of the Notes shall be equal to
the net present value of the amount to be prepaid, discounted at a rate of four
percent (4%) per annum.

 

(b)           The
Company may designate in its notice of prepayment given to the Holder the
scheduled principal payment or payments to which such prepayment shall be
applied.  In the absence of such a designation,
the prepayment shall be applied to the principal payment or payments next due.

 

5.         Place of Payment.  All amounts payable hereunder shall be
payable to the Holder by a check issued by the Company to the Holder and
delivered to the Holder at its office at TL Ventures V Interfund L.P., 435
Devon Park Drive, 700 Building, Wayne, PA 
19087, or by wire transfer to the following account: Comerica Bank, San
Jose, CA, ABA #121-137-552, for the account of TL Ventures V L.P., A/C #
1891668863.  The Holder may direct that
payment be made to another office or account by giving written notice thereof
to the Company as provided herein at least five (5) days before the payment is
to be made.

 

6.         Rank; Additional Indebtedness; Liens.

 

6.1          Obligations
under this Note, including payments of principal and interest and other
payments due under this Note, (i) shall rank pari
passu in bankruptcy with all Permitted Senior Indebtedness (as
defined below) and (ii) shall be senior to all Permitted Subordinated
Indebtedness (as defined below).

 

6.2          So
long as this Note is outstanding, the Company shall not, directly or
indirectly, incur or guarantee, assume or suffer to exist any Company
Indebtedness, other than (i) the Indebtedness evidenced by this Note, (ii)
Permitted Senior Indebtedness, and (iii) Permitted Subordinated Indebtedness.

 

6.3          So long as this Note is outstanding,
the Company shall not, directly or indirectly, allow or suffer to exist any
Lien upon or in any property or assets (including accounts and contract rights)
owned by the Company, except for Permitted Liens (as defined below).

 

3

 

7.         Dividends; Redemption of Equity; Etc.  The Company hereby covenants and agrees that
it will not, directly or indirectly, declare or pay any dividend or other
distribution in respect of any class of its outstanding capital stock, or make
any payment to redeem, purchase or otherwise acquire, or call for redemption,
any of such stock, except for (a) dividends or other distributions in respect
of any series of preferred stock of the Company issued after the date hereof,
provided that no Continuing Default exists, (b) purchases or redemptions of
capital stock of the Company for which the consideration paid, in the
aggregate, does not exceed fifty percent (50%) of the net proceeds received by
the Company from the issuance of capital stock by the Company after the date
hereof, (c) purchases or redemptions of shares of common stock of the Company (“Common Stock”), which
purchases or redemptions, in the aggregate, do not exceed ten percent (10%) of
the number of shares of Common Stock that are issued and outstanding as of the
date hereof, and (d) dividends or distributions payable solely in shares of
Common Stock or in warrants or other rights to acquire Common Stock.

 

8.         Noncircumvention.  The Company hereby
covenants and agrees that it will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or other voluntary action,
other than as contemplated by the terms of this Note, avoid or seek to avoid
the performance of any of the terms of this Note, and will at all times in good
faith carry out all of the provisions of this Note.  The consequences of actions taken by the
Company in the conduct of its business in good faith shall not be deemed to
constitute a breach or default of this Section 8.

 

9.         Mutilated, Defaced, Destroyed, Lost and
Stolen Notes.  In case
any temporary or definitive Note shall become mutilated, defaced or be
apparently destroyed, lost or stolen, the Company shall execute and deliver a
new Note in exchange and substitution for the mutilated or defaced Note or in
substitution for the apparently destroyed, lost or stolen Note.  In the case that a Note has been destroyed,
lost or stolen, the Holder shall furnish to the Company such security or
indemnity as the Company may reasonably require to indemnify and defend and to
save the Company harmless from all risks, and shall also furnish to the Company
evidence to the Company’s reasonable satisfaction of the apparent destruction,
loss or theft of such Note and of the ownership thereof.

 

10.       Certain Definitions.

 

10.1        “Acquisition Indebtedness”
shall mean Company Indebtedness for which the Company becomes obligated in
connection with the acquisition by the Company of the business or assets of
another person or as a result of the merger or consolidation of the Company
with another person, which indebtedness was an obligation of such other person
that existed at the time of such acquisition, merger or consolidation and was
not incurred in connection with or in anticipation of such acquisition, merger
or consolidation.

 

10.2        “Company Indebtedness”
shall mean (a) all obligations of the Company for borrowed money, (b) all
obligations of the Company evidenced by bonds, debentures, notes or other
similar instruments (including, without limitation, any seller notes, deferred
purchase price obligations or earnout obligations issued or entered into in
connection with any acquisition undertaken by the Company), (c) all obligations
in respect of letters of credit, to the extent

 

4

 

drawn, and bankers’ acceptances issued for the account of the Company
and (d) any accrued interest, prepayment premiums or penalties related to any
of the foregoing.

 

10.3        “Liens” shall mean any
mortgage, pledge, security interest, conditional sale or other title retention
agreement, encumbrance, lien, easement, option, debt, charge, claim or
restriction of any kind.

 

10.4        “Partner Indebtedness” shall mean any Company
Indebtedness assumed or incurred in connection with a bona fide transaction
with a third party which involves a license, development, or marketing agreement,
establishment of a joint venture, or the purchase of assets or stock from such
third party, merger with a third party, or any other similar transaction.

 

10.5        “Permitted Liens”
shall mean (a) Liens imposed by law, such as mechanics’, materialmens’,
carriers’, workmens’, repairmens’, contractors’ Liens arising or incurred in
the ordinary course of business and securing payment of obligations that are
not more than 60 days past due or are being contested in good faith and by
appropriate proceedings, (b) easements, rights-of-way, restrictions and other
similar charges and encumbrances of record not interfering materially with the
ordinary conduct of the business of the Company or detracting materially from
the use, occupancy, value or marketability of title of the assets subject
thereto, (c) Liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting, (d) purchase money Liens securing rental payments under
capital lease arrangements, (e) purchase money Liens secured solely by the
property purchased and (f) other Liens arising in the ordinary course of
business and not incurred in connection with the borrowing of money.

 

10.6        “Permitted Senior Indebtedness”
shall mean any Company Indebtedness that ranks pari
passu in bankruptcy to the Company Indebtedness evidenced by this
Note and, other than restrictions contained in Acquisition Indebtedness that
were not put in place in connection with or in anticipation of the acquisition,
merger or consolidation giving rise to the incurrence of such Acquisition
Indebtedness by the Company, that does not contractually prohibit the Company
from making any payments to the Holder pursuant to this Note.

 

10.7        “Permitted Subordinated Indebtedness”
shall mean any Company Indebtedness that is subordinate in right of payment to
the Company Indebtedness evidenced by this Note and, other than restrictions
contained in Acquisition Indebtedness that were not put in place in connection
with or in anticipation of the acquisition, merger or consolidation giving rise
to the incurrence of such Acquisition Indebtedness by the Company, that does
not contractually prohibit the Company from making any payments to the Holder
pursuant to this Note.

 

10.8        “Taxes” shall mean any
foreign, federal, state or local income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer, real property gains,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties or additions to tax or
additional amounts in respect of the foregoing.

 

5

 

11.       Notices.  Any notices required or permitted to be given
under the terms of this Note shall be in writing and shall be deemed to have
been delivered (a) upon receipt, when delivered personally, or (b) one (1)
business day after deposit with a nationally recognized overnight courier, in
each case properly addressed to the party to receive the same.  The addresses for such notices shall be:  If to the Company:  Tapestry Pharmaceuticals, Inc., 4840 Pearl
East Circle, Suite 300W, Boulder, Colorado 
80301, Attention: Chief Financial Officer, with a copy to Tapestry
Pharmaceuticals, Inc., 4840 Pearl East Circle, Suite 300W, Boulder, Colorado  80301, Attention: General Counsel; and if to
the Holder: TL Ventures V Interfund L.P., 435 Devon Park Drive, 700 Building,
Wayne, Pennsylvania  19087.  The Company and the Holder shall provide
written notice to the other in accordance with the provisions hereof of any
change in the address to which it desires notice to be given.

 

12.       Governing Law.  This Note shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.  Each party hereby
irrevocably submits to the nonexclusive jurisdiction of the state and federal
courts sitting in the State of Delaware, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, or that such suit, action or proceeding is
improper.  The parties hereto, including
all guarantors or endorsers, hereby waive presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except as specifically provided
herein, and assent to extensions of the time of payment, or forbearance or
other indulgence without notice.

 

13.       Waiver of Jury Trial.  Each party hereby expressly waives, to the
fullest extent permitted by law, the right to a trial by jury in any action or
proceeding brought with respect to any dispute, controversy or claim arising
out of or relating in any way to this Note or the interpretation, breach,
termination or invalidity thereof, or the transactions contemplated thereby.  This Note may be submitted in any such
proceeding to evidence the foregoing waiver.

 

14.       Successors and Assigns.  The provisions of this Note shall inure to
the benefit of and be binding on any successor to the Company and shall extend
to any Holder hereof.

 

6

 

IN WITNESS WHEREOF,
the Company has caused this instrument to be duly executed on the date set
forth above.

 

	
   

  	
  TAPESTRY PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kai Pace Larson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  Kai Pace Larson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President, General Counsel

  	
   

  
						

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]