EXHIBIT 99(b)
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
ADMINISTRATOR OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THIS AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES ARE "RESTRICTED SECURITIES" UNDER
RULE 144 PROMULGATED PURSUANT TO THE ACT, AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.
8.5% SENIOR SECURED NOTE PURCHASE AGREEMENT
NEOPROBE CORPORATION
THIS AGREEMENT is made this 26th day of March, 2003, between Neoprobe
corporation (the "COMPANY"), incorporated under the laws of the State of
Delaware, with its principal office at 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx,
XX 00000 and Xxxxx X. Xxxx, an individual residing at 0000 Xxxxx Xxxxx Xxxxx,
Xxxxxx, Xxxx 00000 (the "PURCHASER").
In consideration of the mutual covenants contained in this Agreement,
the Company and the Purchaser agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement:
"Act" has the meaning specified in the legend appearing on the first
page.
"Agreement" means this 8.5% Senior Secured Note Purchase Agreement
including all Exhibits and Attachments hereto, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof.
"Business Day" means any day on which banks in the City of Columbus,
Ohio are open for business.
"Closing" means the completion of the purchase and sale of the Note and
Warrant on the Closing Date.
"Closing Date" means the date of the Closing.
"Closing Price" means for each Trading Day, the last transaction price
as reported on the principal exchange on which the Common Stock is listed or
admitted for quotation, or if the Common Stock is not listed or admitted for
quotation on any exchange, the last reported sale
price regular way of the Common Stock on the NASDAQ National Market or NASDAQ
Small Cap Market, as the case may be, or, if the Common Stock is not quoted on
the NASDAQ National Market or NASDAQ SmallCap Market, the closing bid price for
the Common Stock on such day in the over-the-counter market as reported by
Bloomberg, the National Quotation Bureau or NASDAQ.
"Common Stock" means the Common Stock of the Company, $.001 par value.
"Convertible Note" has the meaning specified in Section 2.3.
"Event of Default" has the meaning specified in Section 7.1.
"Exchange Act" has the meaning specified in Section 3.5.
"Maturity Date" has the meaning specified in Section 2.1.
"Note" means the 8.5% Senior Secured Note of the Company, due June 30,
2004 in the Principal Sum that is issued pursuant to this Agreement (including
any notes issued in substitution therefor), as the same may be amended, modified
or supplemented from time to time in accordance with the terms thereof.
"Other Agreement" has the meaning specified in Section 2.3.
"Other Purchaser" has the meaning specified in Section 2.3.
"Principal Sum" has the meaning specified in Section 2.1.
"Reports" has the meaning specified in Section 3.6.
"Registration Rights Agreement" has the meaning specified in Section
2.5.
"SEC" has the meaning specified in Section 3.7.
"Security Agreement" has the meaning specified in Section 2.3.
"Special Committee" has the meaning specified in Section 4.9.
"Trading Day" means any day on which transactions are effected on the
New York Stock Exchange, the NASDAQ National Market System and the NASDAQ
SmallCap Market.
"Transaction Documents" has the meaning specified in Section 2.1.
"Warrant" or "Warrants" means the Warrant purchased from the Company on
the Closing Date and any subsequent Warrant or Warrants issued in exchange or
replacement thereof pursuant to the terms of the original Warrant.
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"Warrant Shares" means shares of Common Stock issuable on exercise of
the Warrant.
Section 2. Authorization and Sale of Note.
2.1 Authorization. Subject to the terms and conditions of
this Agreement, the Company has authorized the execution and delivery to
Purchaser of (a) this Agreement, (b) the Note in the principal amount of
$250,000 (the "PRINCIPAL SUM"), with a maturity date on June 30, 2004 (the
"MATURITY DATE"), (c) the Security Agreement, (d) the Warrant, (e) the
Registration Rights Agreement, and (f) and all other agreements, documents,
instruments and certificates to be delivered by the Company under the foregoing
(the "TRANSACTION DOCUMENTS"). The Company promises to pay to the holder of the
Note the Principal Sum plus any accrued and unpaid interest in cash on the
Maturity Date. Simple interest shall accrue on the unpaid Principal Sum at the
rate of 8.5% per annum from the Closing Date, and shall be payable in arrears on
the last day of each calendar month in cash. The form of the Note is annexed
hereto as Exhibit A. The Company, if not then in default hereunder, shall have
the right to prepay at any time and from time to time before the Maturity Date
any amount or amounts due under the Note. Any partial prepayment shall be in the
minimum amount of $10,000 or any integral multiple thereof.
2.2 Agreement to Sell and Purchase the Note. Subject to
the terms and conditions of this Agreement, the Company will issue and sell the
Note to Purchaser and Purchaser will purchase the Note from the Company, at the
Closing provided for in Section 2.6, at the purchase price of 100% of the
Principal Sum.
2.3 Security. Contemporaneously with entering into this
Agreement, the Company is entering into a separate note purchase agreement (the
"OTHER AGREEMENT") for the sale of a 9.5% Secured Convertible Note in the
principal amount of $250,000 (the "CONVERTIBLE NOTE") to another purchaser (the
"OTHER PURCHASER"). As security for the obligations of the Company under the
Note and the Convertible Note, the Company shall grant to Purchaser and the
Other Purchaser a joint and several first perfected security interest in all its
inventory, equipment, fixtures and other personal property of every kind and
description (other than its accounts), whether now owned or hereafter acquired
or created by the Company, pursuant to the terms of the Security Agreement
attached hereto as Exhibit B.
2.4 Warrants Issuable Upon Closing. As additional
consideration for the purchase of the Note, at the Closing the Company will
issue to Purchaser a warrant to purchase a total of 375,000 shares of the
Company's Common Stock, pursuant to the terms of a separate Warrant, the form of
which is attached hereto as Exhibit C. The Warrant shall have an exercise price
equal to the average Closing Price for the 30 Trading Days immediately preceding
the Closing Date.
2.5 Registration Rights. At the Closing, the Company will
enter into a Registration Rights Agreement with Purchaser and the Other
Purchaser in the form attached hereto as Exhibit D, providing for the filing of
a registration statement under the Act with respect
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to resales of the Warrant Shares and Common Stock issuable upon conversion of
the Convertible Note.
2.6 Time and Place of Closing. The Closing shall be held
at the offices of Porter, Wright, Xxxxxx & Xxxxxx, 00 Xxxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000 on or before April 2, 2003.
2.7 Payment and Delivery. At the Closing, the following
shall occur:
(a) The Company shall deliver or cause to be delivered to
Purchaser an original Note and Warrant, substantially in the form set forth in
Exhibits A and C hereto, and a Security Agreement and a Registration Rights
Agreement, each bearing the original signatures of a duly authorized officer of
the Company.
(b) Purchaser shall cause payment to be made to the
Company in immediately available U.S. funds of the Principal Sum.
(c) The Company and the Other Purchaser shall execute and
deliver to each other the Security Agreement and the Other Agreement, the
Company shall issue and deliver to the Other Purchaser the Convertible Note, and
the Other Purchaser shall cause the Company to receive the Principal Sum in
immediately available U.S. funds.
2.8 Usury. All agreements which either now are or which
shall become agreements between the Company and Purchaser are hereby limited so
that in no contingency or event whatsoever shall the total liability for
payments in the nature of interest, additional interest and other charges exceed
the applicable limits imposed by any applicable usury laws. If any payments in
the nature of interest, additional interest and other charges made under this
Agreement or the Note are held to be in excess of the limits imposed by any
applicable usury laws, it is agreed that any such amount held to be in excess
shall be considered payment of principal hereunder, and the indebtedness
evidenced hereby shall be reduced by such amount so that the total liability for
payments in the nature of interest, additional interest and other charges shall
not exceed the applicable limits imposed by any applicable usury laws, in
compliance with the desires of the Company and Purchaser. This provision shall
never be superseded or waived and shall control every other provision of the
Transaction Documents and all agreements between the Company and Purchaser, or
their successors and assigns.
Section 3. General Representations and Warranties of the Company. The
Company hereby represents and warrants to Purchaser that the following are true
and correct as of the date hereof and as of the Closing Date.
3.1 Organization; Qualification. The Company is a
corporation duly organized and validly existing under the laws of the State of
Delaware and is in good standing under such laws. The Company has all requisite
corporate power and authority to own, lease and operate its properties and
assets, and to carry on its business as presently conducted. The Company is
qualified to do business as a foreign corporation in each jurisdiction in which
the
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ownership of its property or the nature of its business requires such
qualification, except where failure to so qualify would not have a material
adverse effect on the condition (financial or otherwise) or on the earnings,
business affairs, properties or assets of the Company.
3.2 Capitalization. The Company has authorized 50,000,000
shares of Common Stock, of which 38,688,725 are currently issued and
outstanding, and 3,343,124 are currently reserved for issuance under outstanding
warrants and options. The Company also has authorized 5,000,000 shares of
preferred stock, $.001 par value, of which 500,000 shares have been designated
as Series A Junior Participating Preferred Stock, reserved for issuance under
the Company's plan for issuance of rights in connection with certain changes in
control. No shares of preferred stock are issued or outstanding. All issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable and no outstanding shares of Common Stock
are subject to, or have been issued in violation of, preemptive or similar
rights. As of the Closing Date, the Company covenants that it will from its
authorized but unissued shares of Common Stock reserve a sufficient number of
shares of Common Stock for issuance upon exercise of the Warrant. The Company is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its Common Stock or any warrants,
options or other rights to acquire its Common Stock. Except as disclosed in the
Reports and excluding outstanding options to employees and directors, and except
for the securities issuable under this Agreement and the Other Agreement, there
are no contracts relating to the issuance, sale or transfer of any equity
securities, phantom stock or appreciation rights, profit participation, or other
securities (whether or not convertible) of the Company, including options,
warrants, puts, or calls.
3.3 Authorization. The Company has all requisite
corporate right, power and authority to execute and deliver the Transaction
Documents and to consummate the transactions contemplated thereby. All corporate
action on the part of the Company, its directors and stockholders necessary for
the authorization, execution, delivery and performance of the Transaction
Documents by the Company has been taken. Each Transaction Document has been duly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy as they may apply
to the indemnification provisions set forth in the Registration Rights
Agreement. Upon their issuance and delivery pursuant to the Warrant, the Warrant
Shares will be validly issued, fully paid and nonassessable and will be free of
any liens or encumbrances except for those imposed by or on behalf of Purchaser,
its creditors or agents.
3.4 No Conflict. The execution and delivery of each
Transaction Document does not, and the consummation of the transactions
contemplated thereby will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both), or give rise to a
right of termination, cancellation or acceleration of any obligation or to a
loss of a material benefit, under, any provision of the certificate of
incorporation, and any amendments thereto, bylaws and any amendments thereto of
the Company or any material mortgage, indenture, lease or other agreement or
instrument, permit, concession, franchise, license,
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judgment, order, decree statute, law, ordinance, rule or regulation applicable
to the Company, its properties or assets.
3.5 Accuracy of Reports and Information. The Company is
in compliance, to the extent applicable, with all reporting obligations under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), except where the failure to so comply would not have a material adverse
effect on the condition (financial or otherwise) or on the earnings, business
affairs, properties or assets of the Company. The Company has registered its
Common Stock pursuant to Section 12 of the Exchange Act and the Common Stock is
admitted for quotation on the OTC Bulletin Board.
3.6 Absence of Undisclosed Liabilities. The Company has
no material liabilities or obligations, absolute or contingent (individually or
in the aggregate), except as disclosed in the reports filed by the Company under
Section 13 of the Exchange Act in the twelve month period prior to the Closing
Date, and in its annual report on Form 10-KSB for the year ended December 31,
2002 (a draft of which has been provided to Purchaser) (collectively, the
"REPORTS"), as incurred in the ordinary course of business after the date of the
Reports, and obligations to Purchaser and the Other Purchaser incurred under the
Transaction Documents and the Other Agreement.
3.7 Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement or any other Transaction Document, or
the offer, sale or issuance of the Note or Warrant, or the consummation of any
other transaction contemplated hereby or thereby, except the filing with the
United States Securities and Exchange Commission ("SEC") of a registration
statement for the purpose of registering resales by Purchaser of the Warrant
Shares as provided in the Registration Rights Agreement.
3.8 Material Contracts. Except as set forth in the
Reports, the material agreements to which the Company is a party described in
the Reports are valid agreements, in full force and effect, the Company is not
in material breach or material default (with or without notice or lapse of time,
or both) under any of such agreements, and, to the Company's knowledge, the
other contracting party or parties thereto are not in material breach or
material default (with or without notice or lapse of time, or both) under any of
such agreements.
3.9 Litigation. Except as disclosed in the Reports, there
is no action, proceeding or investigation pending, or to the Company's knowledge
threatened, against the Company which might result, either individually or in
the aggregate, in any material adverse change in the business, prospects,
conditions, affairs or operations of the Company. The Company is not a party to
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company currently intends to initiate which will materially affect the Company.
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3.10 Title to Assets. Except as disclosed in the Reports,
and for the security interest to be created pursuant to the Security Agreement,
the Company has good and marketable title to all properties and material assets
described in the Reports as owned by it, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest other than such as
are not material to the business of the Company.
3.11 Required Governmental Permits. The Company is in
possession of and operating in material compliance with all authorizations,
licenses, certificates, consents, orders and permits from state, federal and
other regulatory authorities which are material to the conduct of its business,
all of which are valid and in full force and effect.
3.12 Other Outstanding Securities. Except as disclosed in
the Reports and excluding outstanding options to employees and directors, and
except for the securities issuable under this Agreement and the Other Agreement,
there are no other outstanding debt or equity securities of the Company
presently convertible into or exercisable for shares of Common Stock.
Section 4. Representations, Warranties and Covenants of Purchaser.
Purchaser represents and warrants to, and covenants with, the Company that the
following are true and correct as of the date hereof and as of the Closing Date.
4.1 Authority. The Purchaser has all requisite right,
power, authority and capacity to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable in accordance with its terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies, and to limitations of public policy as they may apply
to the indemnification provisions set forth in the Registration Rights
Agreement.
4.2 Investment Experience. Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Act. Purchaser is the chief
executive officer and a director of the Company, is aware of the Company's
business affairs and financial condition, and has had access to and has acquired
sufficient information about the Company, including the Reports, to reach an
informed and knowledgeable decision to acquire the Note and Warrant. Purchaser
has such business and financial experience as is required to give him the
capacity to protect his own interests in connection with the purchase of the
Note and Warrant.
4.3 Investment Intent. Without limiting the ability to
resell the Warrant Shares pursuant to an effective registration statement, or
upon any exemption from registration that may be legally available, Purchaser
represents that he is purchasing the Note and Warrant, and will acquire the
Warrant Shares, for Purchaser's own account as principal for investment
purposes, and not with a view to a distribution. Purchaser understands that the
acquisition of the Note and Warrant have not been registered under the Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed
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herein. Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchaser or
otherwise acquire or take a pledge of) any of the Note, Warrant, or Warrant
Shares, except in compliance with the Act and any applicable state securities
laws, and the rules and regulations promulgated thereunder.
4.4 Registration or Exemption Requirements. Purchaser
further acknowledges and understands that the Note, Warrant, and Warrant Shares
may not be resold or otherwise transferred except in a transaction registered
under the Act and any applicable state securities laws or unless an exemption
from such registration is available. Purchaser understands that the Note and
Warrant, as well as any certificate for the Warrant Shares, will be imprinted
with a legend that prohibits the transfer of such securities unless (a) it is
registered or such registration is not required pursuant to an exemption
therefrom, and (b) if the transfer is pursuant to an exemption from registration
other than Rule 144 under the Act and an opinion of counsel reasonably
satisfactory to the Company is obtained to the effect that the transaction is so
exempt.
4.5 No Legal, Tax or Investment Advice. Purchaser
understands that nothing in this Agreement or any other materials presented to
Purchaser in connection with the purchase and sale of the Note and Warrant
constitutes legal, tax or investment advice. Purchaser has consulted such legal,
tax and investment advisors as he, in his sole discretion, has deemed necessary
or appropriate in connection with his purchase of the Note and the Warrant.
4.6 Purchaser Review. Purchaser hereby represents and
warrants that he has carefully examined the Reports, and the financial
statements contained therein. Purchaser acknowledges that the Company has made
available to him all documents and information that Purchaser has requested
relating to the Company and has been provided answers to all of Purchaser's
questions concerning the Company, the Note and the Warrant.
4.7 Certain Risks. Purchaser recognizes that the purchase
of the Note and Warrant, and if issued, the Warrant Shares, involves a high
degree of risk in that:
(a) an investment in the Company is highly speculative
and only investors who can afford the loss of their entire investment should
consider investing in the Company and the Note, Warrant, and Warrant Shares;
(b) Purchaser may not be able to liquidate this
investment;
(c) transferability of the Note, Warrant, and Warrant
Shares is extremely limited;
(d) Purchaser could sustain the loss of the entire
investment in the Note, Warrant and Warrant Shares;
(e) no return on investment, whether through
distributions, appreciation, transferability or otherwise, and no performance
by, through or of the Company, has been promised, assured, represented or
warranted by the Company, or by any director, officer, employee, agent or
representative thereof; and
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(f) while the Common Stock is presently quoted on the OTC
Bulletin Board and while Purchaser is the beneficiary of certain registration
rights provided herein: (i) the issuance of the Note, Warrant, and Warrant
Shares are not registered under applicable federal or state securities laws, and
thus may not be sold, conveyed, assigned or transferred unless such transaction
is registered under such laws or unless an exemption from registration is
available under such laws, as more fully described below; and (i) the Note and
Warrant are not quoted, traded or listed for trading or admitted for quotation
on any organized market or quotation system, and there is therefore no present
public or other market for such Note or Warrant, and (iii) there can be no
assurance that the Common Stock will continue to be quoted, traded or listed for
trading or authorized for quotation on the OTC Bulletin Board or on any other
organized market or quotation system.
4.8 No Registration, Review or Approval. Purchaser
acknowledges and understands that the limited private offering and sale of the
Note and Warrant pursuant to this Agreement, and the offering and sale of the
Warrant Shares, have not been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not registered under the Act
or under the securities or "blue sky" laws, rules or regulations of any state.
Purchaser acknowledges, understands and agrees that the Note, Warrant, and
Warrant Shares are being offered and sold hereunder pursuant to (a) a private
placement exemption to the registration provisions of the Act pursuant to
Section 3(b) or Section 4(2) of such Act and Regulation D promulgated under such
Act, and (b) a similar exemption to the registration provisions of applicable
state securities laws.
4.9 Disclosure by Purchaser. Purchaser is the chief
executive officer and a director of the Company. Purchaser represents and
warrants that all material facts as to his relationship or interest in the
transactions contemplated by this Agreement have been disclosed to the special
committee of the Board of Directors (the "SPECIAL COMMITTEE") that negotiated
the terms of this Agreement with Purchaser, and that he has disclosed to the
Special Committee all contracts, negotiations, events, corporate developments,
results of operations and other facts of which he has knowledge that a
reasonable person would consider likely to have a material effect, whether
positive or adverse, on the business, assets, liabilities, operations,
prospects, and condition (financial or otherwise) of the Company.
4.10 Purchaser's Knowledge of Breach. Purchaser is not
aware of any facts or circumstances that would be sufficient, in the absence of
other facts or circumstances not currently known to Purchaser, to constitute a
breach of any of the representations and warranties of the Company contained in
this Agreement or in any of the Transaction Documents. Purchaser shall be deemed
to have waived in full any breach of any of the Company's representations and
warranties of which Purchaser has such awareness at the Closing.
Section 5. Conditions to Purchaser's Obligation to Purchase. The
Company understands that Purchaser's obligation to purchase the Note and Warrant
is conditioned upon the truth and accuracy of the representations and warranties
of the Company in Section 3 as of the Closing Date, and:
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(a) Execution and delivery by the Company of the original
Note and Warrant to Purchaser;
(b) Execution and delivery by the Company of the Security
Agreement and Registration Rights Agreement, in the respective forms of Exhibits
B and D; and
(c) Execution, delivery and performance of the Other
Agreement by the parties thereto.
Section 6. Conditions to Company's Obligation to Sell. Purchaser
understands that the Company's obligation to sell the Note and Warrant is
conditioned upon the truth and accuracy of the representations and warranties of
Purchaser in Section 4 as of the Closing Date, and:
(a) Delivery by Purchaser to the Company of good funds as
payment in full for the purchase of the Note and Warrant; and
(b) Execution and delivery by Purchaser of the of the
Security Agreement and Registration Rights Agreement, in the respective forms of
Exhibits B and D.
Section 7. Default.
7.1 Events of Default. An "Event of Default" shall exist
if any of the following conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
on the Note when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest
on the Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in
paragraphs (a) and (b) of this Section 7.1) and such default is not remedied
within 30 days after the Company receives written notice of such default from
any holder of the Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (c) of Section 7.1); or
(d) A one or more defaults under any bond, debenture,
note or other evidence of indebtedness of the Company owed to any person other
than Purchaser, or under any indenture or other instrument under which any such
evidence of indebtedness has been issued or by which it is governed, or under
any lease of any asset, in any case in which the aggregate amount of all such
defaults are in excess of $100,000.00, and the expiration of the applicable
period of grace, if any, specified in such evidence of indebtedness, indenture,
other instrument or lease; or
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(e) any representation or warranty made in writing by or
on behalf of the Company or by any officer of the Company in this Agreement or
in any writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date as of
which made; or
(f) the rendering against the Company of one or more
final judgments, decrees or orders for the payment of money which in the
aggregate exceed $100,000.00 and the continuance of such judgments, decrees or
orders unsatisfied and in effect for any period of 30 consecutive days without a
stay of execution; or
(g) the Company (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, or any such petition shall be filed
against the Company and such petition shall not be dismissed within 60 days; or
(i) an event of default shall occur under any other
Transaction Document; or
(j) the sale, exchange, or other disposition (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Company, without the consent of the holder of the Note; or
(k) a merger or consolidation of the Company without the
consent of the holder of the Note, other than a merger or consolidation in which
the voting equity securities of the Company immediately prior to the merger or
consolidation continue to represent (either by remaining outstanding or being
converted into securities of the surviving entity) more than fifty percent (50%)
of the combined voting power of the Company or surviving entity immediately
after the merger or consolidation with another entity.
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7.2. Acceleration and Remedies.
(a) If any Event of Default has occurred and is
continuing, the holder of the Note may at any time at its option, by notice or
notices to the Company, declare the Note to be immediately due and payable.
(b) Upon the Note becoming due and payable under this
Section 7.2, the Note will forthwith mature, and the entire unpaid Principal
Sum, plus (i) all accrued and unpaid interest thereon, and (ii) an amount equal
to 10% of the unpaid Principal Sum, shall all be immediately due and payable, in
each and every case without presentment, demand, protest or further notice, all
of which are hereby waived, and the holder thereof shall be entitled to exercise
its rights and remedies as a secured party under the Security Agreement and the
Uniform Commercial Code.
(c) If any Event of Default has occurred and is
continuing, and irrespective of whether the Note has been declared immediately
due and payable under paragraph (a) of this Section 7.2, the holder of the Note
may proceed to protect and enforce its rights by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in the Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.
8. Registration; Exchange; Substitution of Note.
8.1. Registration of Note. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of the Note. The name and address of each holder of the Note, each
transfer thereof and the name and address of each transferee shall be registered
in such register. Prior to due presentment for registration of transfer, the
person in whose name the Note shall be registered shall be deemed and treated as
the owner and holder thereof for all purposes hereof, and the Company shall not
be affected by any notice or knowledge to the contrary.
8.2. Transfer and Exchange of Note. Upon surrender of the
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of the Note or his attorney duly authorized in
writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), a new Note (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such person as such holder may request and shall be substantially in
the form of Exhibit A. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company shall not be required to register or otherwise recognize any
transfer that purports to be for less than the entire unpaid principal
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amount of the Note. Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be required to make in writing the
representations set forth in Sections 4.2 through 4.8. Notwithstanding any
provision of this Agreement to the contrary, the Company may refuse to register
the transfer of the Note to any person that is not an "accredited investor" as
defined in Rule 501 of Regulation D.
8.3. Replacement of Note. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note, and (a) in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it or (b) in the case of
mutilation, upon surrender and cancellation thereof, then in either case, the
Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
Section 9. Notices. All notices and communications provided for
hereunder shall be in writing and sent (a) by fax if the sender on the same day
sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(a) if to the Company, to
Neoprobe Corporation
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Attn: Chief Financial Officer
(fax) (000) 000-0000
copy to:
Xxxxxxx X. Xxxxx, Xx.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
or to such other person at such other place as the Company shall designate to
Purchaser in writing;
(b) if to Purchaser, to
Xxxxx X. Xxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
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copy to:
Xxxxxxx X. Xxxxxx, Esq.
0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
or at such other address as Purchaser shall designate to the Company in writing;
or
(c) if to any transferee or transferees of
Purchaser, at such address or addresses as shall have been furnished to the
Company at the time of the transfer or transfers, or at such other address or
addresses as may have been furnished by such transferee or transferees to the
Company in writing.
Section 10. Miscellaneous.
10.1 Entire Agreement. This Agreement, including all
Exhibits and Attachments embody the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or agreement or
any kind not expressly set forth in this Agreement shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
10.2 Amendments. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and by
Purchaser.
10.3 Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.
10.4 Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
10.5 Governing Law/Jurisdiction. This Agreement will be
construed and enforced in accordance with and governed by the laws of the State
of Ohio, without reference to principles of conflicts of law. Each party hereby
agrees that if the other party to this Agreement obtains a judgment against it
in such a proceeding, the party which obtained such judgment may enforce same by
summary judgment in the courts of any country having jurisdiction over the party
against whom such judgment was obtained, and each party hereby waives any
defenses available to it under local law and agrees to the enforcement of such a
judgment. Each party to this Agreement irrevocably consents to the service of
process in any such proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at its address set provided for
notices under Section 9. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law.
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10.6 Disputes. Any controversy, claim or dispute arising
out of or relating to this Agreement or the breach, termination, enforceability
or validity of this Agreement, including the determination of the scope or
applicability of the agreement to arbitrate set forth in this Section 10.6 shall
be determined exclusively by binding arbitration in the City of Columbus, Ohio.
The arbitration shall be governed by the rules and procedures of the American
Arbitration Association (the "AAA") under its Commercial Arbitration Rules and
its Supplementary Procedures for Large, Complex Disputes; provided that persons
eligible to be selected as arbitrators shall be limited to attorneys-at-law each
of whom (i) is on the AAA's Large, Complex Case Panel or a Center for Public
Resources ("CPR") Panel of Distinguished Neutrals, or has professional
credentials comparable to those of the attorneys listed on such AAA and CPR
Panels and (ii) has actively practiced law (in private or corporate practice or
as a member of the judiciary) for at least 15 years in the State of Ohio
concentrating in either general commercial litigation or general corporate and
commercial matters. Any arbitration proceeding shall be before one arbitrator
mutually agreed to by the parties to such proceeding (who shall have the
credentials set forth above) or, if the parties are unable to agree to the
arbitrator within 15 business days of the initiation of the arbitration
proceedings, then by the AAA. No provision of, nor the exercise of any rights
under, this Section 10.6 shall limit the right of any party to request and
obtain from a court of competent jurisdiction in the State of Ohio, County of
Franklin (which shall have exclusive jurisdiction for purposes of this Section
10.6) before, during or after the pendency of any arbitration, provisional or
ancillary remedies and relief including injunctive or mandatory relief or the
appointment of a receiver. The institution and maintenance of an action or
judicial proceeding for, or pursuit of, provisional or ancillary remedies shall
not constitute a waiver of the right of any party, even if it is the plaintiff,
to submit the dispute to arbitration if such party would otherwise have such
right. Each of the parties hereby submits unconditionally to the exclusive
jurisdiction of the state and federal courts located in the County of Franklin,
State of Ohio for purposes of this provision, waives objection to the venue of
any proceeding in any such court or that any such court provides an inconvenient
forum and consents to the service of process upon it in connection with any
proceeding instituted under this Section 10.6 in the same manner as provided for
the giving of notice under this Agreement. Judgment upon the award rendered may
be entered in any court having jurisdiction. The parties hereby expressly
consent to the nonexclusive jurisdiction of the state and federal courts
situated in the County of Franklin, State of Ohio for this purpose and waive
objection to the venue of any proceeding in such court or that such court
provides an inconvenient forum. The arbitrator shall have the power to award
recovery of all costs (including attorneys' fees, administrative fees,
arbitrators' fees and court costs) to the prevailing party. The arbitrator shall
not have power, by award or otherwise, to vary any of the provisions of this
Agreement.
10.7 Recovery of Attorneys' Fees. In any action arising
under this Agreement, the Note, the Security Agreement, or the Registration
Rights Agreement then the prevailing party shall be entitled to recovery of its
legal fees and expenses incurred in connection therewith.
10.8 Counterparts/Facsimile. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other party. In lieu of the
original, a
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facsimile transmission or copy of the original shall be as effective and
enforceable as the original.
10.9 Publicity. Neither Purchaser nor the Company shall
issue any press releases or otherwise make any public statement with respect to
the transactions contemplated by this Agreement without the prior written
consent of the other, except as may be required by applicable law or regulation.
10.10 Survival. The representations and warranties in this
Agreement shall survive Closing.
10.11 Expenses. Each of the parties shall bear its own
legal and other expenses in connection with the negotiation and closing of the
transactions contemplated hereby, except that the Company will reimburse
Purchaser for up to $10,000 in legal fees and expenses incurred by Purchaser
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized representatives the day and year
first above written.
NEOPROBE CORPORATION
By /s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx, Vice President of Finance
PURCHASER
/s/ Xxxxx X. Xxxx
---------------------------------------------
Xxxxx X. Xxxx
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