Contract
Exhibit
10.2
THIS NOTE
AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN
OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
THE MAKER THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
NEOPROBE
CORPORATION
Amended
and Restated 10% Series A Senior Secured Convertible Promissory
Note
due
December 26, 2011
No:
1A
|
$7,000,000.00
|
Dated:
December 26, 2007
Amended
and Restated: July 24, 2009
For value received, NEOPROBE
CORPORATION, a Delaware corporation (the “Maker”), hereby
promises to pay to the order of Platinum-Montaur Life Sciences, LLC, 000 Xxxx
00xx
Xxxxxx, Xxx Xxxx, XX 00000 (together with its successors, representatives and
permitted assigns, the “Holder”), in
accordance with the terms hereinafter provided, the principal amount of Seven
Million and 00/100 Dollars ($7,000,000), together with interest thereon. This
Note is being issued pursuant to the Purchase Agreement, and the Exchange
Agreement (as those terms are defined in Section 1.1 hereof). Upon
satisfaction of conditions set forth in the Purchase Agreement, the Maker issued
to the Holder the Maker’s 10% Series B Senior Secured Convertible Promissory
Note (“Series B
Note”) and shares of the Maker’s 8% Series A Convertible Preferred Stock
(“Preferred
Stock”). This Note and the Series B Note, as amended and restated in
connection with the Exchange Agreement, are collectively referred to herein as
the “Notes.”
All payments under or pursuant to this
Note shall be made in United States Dollars in immediately available funds to
the Holder at the address of the Holder first set forth above or at such other
place as the Holder may designate from time to time in writing to the Maker or
by wire transfer of funds to the Holder’s account, instructions for which are
attached hereto as Exhibit A . The outstanding principal balance of this Note
shall be due and payable on December 26, 2011 (the “Maturity Date”) or at
such earlier time as provided herein.
ARTICLE
I
1.4
Security
Agreement. The obligations of the Maker hereunder are secured
by a continuing security interest in certain assets of the Maker pursuant to the
terms of a Security Agreement dated as of December 26, 2007 by and between the
Maker and the Holder, a Patent, Trademark and Copyright Security Agreement,
dated as of December 26, 2007, by and among the Maker and the Maker’s
subsidiaries, on the one hand, and the Holder, on the other hand, and a Blocked
Account Control Agreement (“Account Control
Agreement”) among the Maker, the Holder and U.S. Bank National
Association (“Bank”), pursuant to
the terms of Section 5.15 of the Purchase Agreement.
2
1.5
Payment on Non-Business
Days. Whenever any payment to be made shall be due on a
Saturday, Sunday or a public holiday under the laws of the State of New York,
such payment may be due on the next succeeding business day and such next
succeeding day shall be included in the calculation of the amount of accrued
interest payable on such date.
ARTICLE
II
(a)
any default in the payment of (i) the
principal amount hereunder when due, or (ii) interest on, or liquidated damages
in respect of, this Note, as and when the same shall become due and payable
(whether on the Maturity Date or by acceleration or otherwise); or
(b)
the suspension from listing, without
subsequent listing on any one of, or the failure of the Common Stock to be
listed on at least one of the OTC Bulletin Board, the American Stock Exchange,
the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market or The New York Stock Exchange, Inc. for a period of more than five (5)
consecutive Trading Days; or
(c)
the Maker shall fail to (i) timely deliver the
shares of Common Stock upon conversion of the Note or any interest accrued and
unpaid, (ii) file a Registration Statement in accordance with the terms of the
Registration Rights Agreement or (iii) make the payment of any fees or other
payments due under this Note, the Purchase Agreement, the Registration Rights
Agreement or the other Transaction Documents, which failure is not remedied
within five (5) business days after such performance is due; or
3
(d)
while the Registration Statement is required
to be maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of the Registration Statement (as defined in the
Registration Rights Agreement) lapses for any reason (including, without
limitation, the issuance of a stop order) or is unavailable to the Holder for
sale of the Registrable Securities (as defined in the Registration Rights
Agreement) as provided in the Registration Rights Agreement (other than as a
result of any breach of the Registration Rights Agreement or violation of law by
any holder of the Notes, or their agents or Affiliates), and such lapse or
unavailability continues for a period of ten (10) consecutive Trading
Days, provided that the Maker has not exercised its rights pursuant
to Section 3(n) of
the Registration Rights Agreement; or
(e)
default shall be made in the performance or
observance of (i) any covenant, condition or agreement contained in this Note
(other than is set forth in (a) through (d) above) and such default is not cured
within ten (10) days after the earlier of (A) the date the Maker receives notice
from the Holder of the occurrence thereof or (B) the date on which the Maker
knew or should have known, if it had exercised reasonable diligence, of such
default, or (ii) any material covenant, condition or agreement contained in the
Purchase Agreement, Registration Rights Agreement, the Series B Note, or any
other Transaction Document that is not covered by any other provisions of this
Section 2.1 and such default is not cured within ten (10) days after the earlier
of (A) the date the Maker receives notice from the Holder of the occurrence
thereof or (B) the date on which the Maker knew or should have known, if it had
exercised reasonable diligence, of such default; or
(f)
any material representation or warranty made
by the Maker herein or in the Purchase Agreement, the Series B Note or any other
Transaction Document shall prove to have been false or incorrect or breached in
a material respect on the date as of which made; or
(g)
the Maker shall (i) default in any payment of any amount or amounts of principal
of or interest on any Indebtedness (other than the Indebtedness hereunder) the
aggregate principal amount of which Indebtedness, in the aggregate, exceeds
$100,000, which default entitles the holder or holders of such Indebtedness to
accelerate the maturity thereof, or (ii) default in the observance or
performance of any other agreement or condition relating to any Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, which default, event
or condition continues beyond any applicable cure period, and the effect of
which default, event or condition is to cause, or to permit the holder or
holders or beneficiary or beneficiaries of such Indebtedness to cause with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity; or
(h)
the Maker shall (i) apply for or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property
or assets, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the United States Bankruptcy Code (as now
or hereafter in effect) or under the comparable laws of any jurisdiction
(foreign or domestic), (iv) file a petition seeking to take advantage of any
bankruptcy, insolvency, moratorium, reorganization or other similar law
affecting the enforcement of creditors’ rights generally, (v) acquiesce in
writing to any petition filed against it in an involuntary case under United
States Bankruptcy Code (as now or hereafter in effect) or under the comparable
laws of any jurisdiction (foreign or domestic), (vi) admit in writing its
inability to pay its debts as they become due, or (vii) take any action under
the laws of any jurisdiction (foreign or domestic) analogous to any of the
foregoing; or
4
(i)
a proceeding or case shall be commenced in
respect of the Maker, without its application or consent, in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets in connection with the liquidation
or dissolution of the Maker, or (iii) similar relief in respect of it under any
law providing for the relief of debtors, and such proceeding or case described
in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in
effect, for a period of sixty (60) days or any order for relief shall be entered
in an involuntary case under United States Bankruptcy Code (as now or hereafter
in effect) or under the comparable laws of any jurisdiction (foreign or
domestic) against the Maker or action under the laws of any jurisdiction
(foreign or domestic) analogous to any of the foregoing shall be taken with
respect to the Maker and shall continue undismissed, or unstayed and in effect
for a period of sixty (60) days; or
(j)
at any point after 135 vital blue dye lymph
nodes have been obtained from patients who have completed surgery and injection
of the drug in the Phase 3 clinical trial of Lymphoseek (NEO3-05), the failure
of Maker to achieve the primary objective in such trial of efficacy of
Lymphoseek, which is the concordance of in-vivo detection rate of Lymphoseek and
vital blue dye in tumor-draining sentinel lymph nodes as confirmed by pathology
in at least ninety-three percent (93%) of such patients, determined in good
faith by the Company and the Holder following a review of the unaudited trial
data; or
(k)
the Bank shall provide written notice to the
Maker or Holder of the Bank’s termination of the Account Control Agreement, and
the Maker does not within forty-five (45) days following such notice (i)
establish a replacement blocked account pursuant to Section 5.15 of the Purchase
Agreement with another financial institution, on substantially the same terms
contained in the Account Control Agreement, or as otherwise reasonably
acceptable to Maker and Holder (the “Replacement
Account”), (ii) transfer all funds held in the account subject to the
Account Control Agreement to the Replacement Account, and (iii) provide evidence
to the Holder that an instruction letter, substantially in the form of the
Instruction Letter attached as Exhibit M to the Purchase Agreement, has been
executed by each of the Maker and Ethicon, irrevocably instructing Ethicon to
make payments under the Ethicon Agreement to the Replacement Account;
or
(l)
the occurrence of any default or event of
default under any other Note or the failure by the Maker to comply with its
material obligations under the Certificate of Designations governing the terms
of the Preferred Stock.
5
ARTICLE
III
3.1
Conversion
Option. At any time and from time to time on or after the Issuance
Date:
(a)
up to Three Million Five Hundred Thousand and 00/100 Dollars of the
outstanding principal balance of this Note (the “First Conversion
Tranche”) shall be convertible (in whole or in part and from time to
time), at the option of the Holder (the “First Conversion
Option”), into such number of fully paid and non-assessable shares of
Common Stock (the “First Conversion
Rate”) as is determined by dividing (x) that portion of the First
Conversion Tranche as of such date that the Holder elects to convert by (y) the
First Tranche Conversion Price (as defined in Section 3.2 hereof) then in effect
on the date on which the Holder faxes a notice of conversion (the “Conversion Notice”),
duly executed, to the Maker (facsimile number (000) 000-0000, Attn.: Xxxxx X.
Xxxxxx, Vice President - Finance) (the “Conversion Date”);
and
(b)
up to an additional Three Million Five Hundred Thousand and 00/100 Dollars
of the outstanding principal balance of this Note (the “Second Conversion
Tranche”) shall be convertible (in whole or in part and from time to
time), at the option of the Holder (the “Second Conversion
Option”), into such number of fully paid and non-assessable shares of
Common Stock (the “Second Conversion
Rate”) as is determined by dividing (x) that portion of the Second
Conversion Tranche as of such date that the Holder elects to convert by (y) the
Second Tranche Conversion Price (as defined in Section 3.2 hereof) then in
effect on the Conversion Date,
provided, however, that the
First and Second Tranche Conversion Prices shall be subject to adjustment as
described in Section 3.5 below. The Holder shall deliver this Note to the
Maker at the address designated in the Purchase Agreement at such time that this
Note is fully converted. With respect to partial conversions of this Note, the
Maker shall keep written records of the amount of this Note converted as of each
Conversion Date.
6
(a)
Not later than three (3) Trading Days after
any Conversion Date, the Maker or its designated transfer agent, as applicable,
shall issue and deliver to the Depository Trust Company (“DTC”) account on the
Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as
specified in the Conversion Notice, the number of shares of Common Stock to
which the Holder shall be entitled upon such conversion, registered in the name
of the Holder or its designee. In the alternative, not later than three
(3) Trading Days after any Conversion Date, the Maker shall deliver to the
applicable Holder by express courier a certificate or certificates which shall
be free of restrictive legends and trading restrictions (other than those
required pursuant to the Purchase Agreement) representing the number of shares
of Common Stock being acquired upon the conversion of this Note (the “Delivery Date”).
Notwithstanding the foregoing to the contrary, the Maker or its transfer agent
shall only be obligated to issue and deliver the shares to the DTC on the
Holder’s behalf via DWAC (or certificates free of restrictive legends) if such
conversion is in connection with a sale by the Holder and the Holder has
complied with the applicable prospectus delivery requirements or an exemption
from such registration requirements (each as evidenced by documentation
furnished to and reasonably satisfactory to the Maker). If in the case of any
Conversion Notice such certificate or certificates are not delivered to or as
directed by the Holder by the Delivery Date, the Holder shall be entitled by
written notice to the Maker at any time on or before its receipt of such
certificate or certificates thereafter, to rescind such conversion, in which
event the Maker shall immediately return this Note tendered for conversion,
whereupon the Maker and the Holder shall each be restored to their respective
positions immediately prior to the delivery of such notice of revocation, except
that any amounts described in Sections 3.3(b) and (c) shall be payable through
the date notice of rescission is given to the Maker.
(b)
The Maker understands that a delay in the
delivery of the shares of Common Stock upon conversion of this Note beyond the
Delivery Date could result in economic loss to the Holder. If the Maker fails to
deliver to the Holder such shares via DWAC (or, if applicable, certificates), or
fails to deliver unlegended certificates representing such shares if required
pursuant to Section 3.3(a) hereof, by the Delivery Date, the Maker shall pay to
such Holder, in cash, an amount per Trading Day for each Trading Day until such
shares are delivered via DWAC or certificates are delivered (if applicable),
together with interest on such amount at a rate of 10% per annum, accruing until
such amount and any accrued interest thereon is paid in full, equal to the
greater of (A) (i) 1% of the aggregate principal amount of the Notes requested
to be converted for the first five (5) Trading Days after the Delivery Date and
(ii) 2% of the aggregate principal amount of the Notes requested to be converted
for each Trading Day thereafter and (B) $2,000 per day (which amount shall be
paid as liquidated damages and not as a penalty). Nothing herein shall limit a
Holder’s right to pursue actual damages for the Maker’s failure to deliver
certificates representing shares of Common Stock upon conversion within the
period specified herein and such Holder shall have the right to pursue all
remedies available to it at law or in equity (including, without limitation, a
decree of specific performance and/or injunctive relief). Notwithstanding
anything to the contrary contained herein, the Holder shall be entitled to
withdraw a Conversion Notice, and upon such withdrawal the Maker shall only be
obligated to pay the liquidated damages accrued in accordance with this Section
3.3(b) through the date the Conversion Notice is withdrawn.
7
(a)
Notwithstanding anything to the contrary set
forth in Section 3 of this Note, at no time may the Holder convert all or a
portion of this Note if the number of shares of Common Stock to be issued
pursuant to such conversion would exceed, when aggregated with all other shares
of Common Stock owned by the Holder at such time, the number of shares of Common
Stock which would result in the Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) more
than 4.99% of all of the Common Stock outstanding at such time; provided, however, that upon
the Holder providing the Maker with sixty-one (61) days notice (pursuant to
Section 4.1 hereof) (the “Waiver Notice”) that
the Holder waives the limitations contained in this Section 3.4(a) with
regard to any or all shares of Common Stock issuable upon conversion of this
Note, this Section 3.4(a) will be of no force or effect with regard to all or a
portion of the Note referenced in the Waiver Notice.
(b)
Notwithstanding anything to the contrary set
forth in Section 3 of this Note, at no time may the Holder convert all or a
portion of this Note if the number of shares of Common Stock to be issued
pursuant to such conversion, when aggregated with all other shares of Common
Stock owned by the Holder at such time, would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 9.99% of the then issued and outstanding
shares of Common Stock outstanding at such time; provided, however,
that upon the Holder providing the Maker with a Waiver Notice that the Holder
waives the limitations contained in this Section 3.4(b) with regard to any or
all shares of Common Stock issuable upon conversion of this Note, this Section
3.4(b) shall be of no force or effect with regard to all or a portion of the
Note referenced in the Waiver Notice.
(c)
Notwithstanding the above, the provisions of Section 3.4(a) and 3.4(b)
shall not be applicable when calculating any adjustment to the Conversion Prices
hereunder or any other adjustments under Section 3.5 hereof.
(a)
Until the Note has been paid in full or
converted in full, each of the Conversion Prices shall be subject to adjustment
from time to time as follows (but shall not be increased, other than pursuant to
Section 3.5(a)(i) hereof):
(i)
Adjustments for Stock Splits and
Combinations. If the Maker shall at any time or from time to time
after the Issuance Date, effect a stock split of the outstanding Common Stock,
the applicable Conversion Prices in effect immediately prior to the stock split
shall be proportionately decreased. If the Maker shall at any time or from
time to time after the Issuance Date, combine the outstanding shares of Common
Stock, the applicable Conversion Prices in effect immediately prior to the
combination shall be proportionately increased. Any adjustments under this
Section 3.5(a)(i) shall be effective at the close of business on the date the
stock split or combination occurs.
8
(ii)
Adjustments for Certain Dividends
and Distributions. If the Maker shall at any time or from
time to time after the Issuance Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, and in each event, the
applicable Conversion Prices in effect immediately prior to such event shall be
decreased as of the time of such issuance or, in the event such record date
shall have been fixed, as of the close of business on such record date, by
multiplying each of the applicable Conversion Prices then in effect by a
fraction:
(A)
the numerator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date;
and
(B)
the denominator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution.
(iii)
Adjustment for Other Dividends
and Distributions. If the Maker shall at any time or from
time to time after the Issuance Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in securities of the Maker or any other Person other than
shares of Common Stock, then, and in each event, an appropriate revision to the
applicable Conversion Prices shall be made and provision shall be made (by
adjustments of the Conversion Prices or otherwise) so that the holders of this
Note shall receive upon conversions thereof, in addition to the number of shares
of Common Stock receivable thereon, the number of securities of the Maker or
other issuer (as applicable) which they would have received had this Note been
converted into Common Stock on the date of such event and had thereafter, during
the period from the date of such event to and including the Conversion Date,
retained such securities (together with any distributions payable thereon during
such period), giving application to all adjustments called for during such
period under this Section 3.5(a)(iii) with respect to the rights of the holders
of this Note; provided,
however, that if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Prices shall be adjusted pursuant to this paragraph as
of the time of actual payment of such dividends or
distributions.
9
(iv) Adjustments for Reclassification,
Exchange or Substitution. If the Common Stock issuable upon
conversion of this Note at any time or from time to time after the Issuance Date
shall be changed to the same or different number of shares of any class or
classes of stock, whether by reclassification, exchange, substitution or
otherwise (other than by way of a stock split or combination of shares or stock
dividends provided for in Sections 3.5(a)(i), (ii) and (iii), or a
reorganization, merger, consolidation, or sale of assets provided for in Section
3.5(a)(v)), then, and in each event, an appropriate revision to the Conversion
Prices shall be made and provisions shall be made (by adjustments of the
Conversion Prices or otherwise) so that the Holder shall have the right
thereafter to convert this Note into the kind and amount of shares of stock and
other securities receivable upon reclassification, exchange, substitution or
other change, by holders of the number of shares of Common Stock into which such
Note might have been converted immediately prior to such reclassification,
exchange, substitution or other change, all subject to further adjustment as
provided herein.
(v)
Adjustments for Reorganization,
Merger, Consolidation or Sales of Assets. If at any time or
from time to time after the Issuance Date there shall be a capital
reorganization of the Maker (other than by way of a stock split or combination
of shares or stock dividends or distributions provided for in Section 3.5(a)(i),
(ii) and (iii), or a reclassification, exchange or substitution of shares
provided for in Section 3.5(a)(iv)), or a merger or consolidation of the Maker
with or into another corporation where the holders of outstanding voting
securities prior to such merger or consolidation do not own over fifty percent
(50%) of the outstanding voting securities of the merged or consolidated entity,
immediately after such merger or consolidation, or the sale of all or
substantially all of the Maker’s properties or assets to any other person (an
“Organic Change”), then as a
part of such Organic Change, (A) if the surviving entity in any such Organic
Change has a class of equity securities registered under the Exchange Act, and
its common stock is listed or quoted on a national exchange or the OTC Bulletin
Board, an appropriate revision to the Conversion Prices shall be made and
provision shall be made (by adjustments of the Conversion Prices or otherwise)
so that the Holder shall have the right thereafter to convert such Note into the
kind and amount of shares of stock and other securities or property of the Maker
or any successor corporation resulting from such Organic Change, and (B) if the
surviving entity in any such Organic Change does not have a class of equity
securities registered under the Exchange Act, or its common stock is not listed
or quoted on a national exchange or the OTC Bulletin Board, the Holder shall
have the right to accelerate the maturity of this Note. In any case
referenced in clause (A) above, appropriate adjustment shall be made in the
application of the provisions of this Section 3.5(a)(v) with respect to the
rights of the Holder after the Organic Change to the end that the provisions of
this Section 3.5(a)(v) (including any adjustment in the applicable Conversion
Prices then in effect and the number of shares of stock or other securities
deliverable upon conversion of this Note) shall be applied after that event in
as nearly an equivalent manner as may be practicable.
(c)
[Reserved]
10
11
(A)
require the Maker to prepay that portion of
this Note for which the Maker is unable to issue Common Stock in accordance with
the Holder’s Conversion Notice (the “Mandatory
Prepayment”) in an amount equal to one hundred twenty-five percent (125%
of the portion of aggregate principal amount of this Note that Maker was unable
to convert to Common Stock (the “Mandatory Prepayment
Price”);
(B)
if the Maker’s inability to fully convert is
pursuant to Section 3.6(a)(iii) above, require the Maker to issue restricted
shares of Common Stock in accordance with such holder’s Conversion Notice;
or
(C)
void its Conversion Notice and retain or have
returned, as the case may be, this Note that was to be converted pursuant to the
Conversion Notice (provided that the Holder’s voiding its Conversion Notice
shall not effect the Maker’s obligations to make any payments which have accrued
prior to the date of such notice).
12
(i)
any Event of Default pursuant to
Sections 2.1 (b), (c) or (d) shall have occurred;
(ii)
the Maker’s notice to any holder of the
Notes, including by way of public announcement, at any time, of its inability to
comply or its intention not to comply with proper requests for conversion of any
Notes into shares of Common Stock; or
(iii)
the Maker deregisters its shares of
Common Stock and as a result such shares of Common Stock are no longer publicly
traded; or
(iv)
the Maker consummates a “going private”
transaction and as a result the Common Stock is no longer registered under
Sections 12(b) or 12(g) of the Exchange Act.
13
ARTICLE
IV
For so long as this Note is
outstanding, without the prior written consent of the holders of at least a
majority of the then outstanding principal balance hereof:
(a)
Liens that are Permitted
Encumbrances;
(b)
Liens for purchase money obligations, incurred
in the ordinary course of the Maker’s business, to acquire assets that do not
exceed the purchase price of the asset and that encumber only the asset being
purchased; and
(c)
any Lien listed on
Schedule 3.12 to the Purchase Agreement.
(a) Indebtedness
existing on the Issuance Date and disclosed in the Commission
Documents;
(b) Indebtedness
created under the Transaction Documents;
(c) Non-current
liabilities for post-employment healthcare and other insurance
benefits;
(d) Trade
payables and insurance premium financing incurred in the ordinary course of
business and consistent with past practices; and
(e) Indebtedness
secured by Xxxxx permitted under Section 4.1.
14
15
ARTICLE
V
16
5.2
Governing Law.
This Note shall be governed by and construed in accordance with the
internal laws of the State of New York, without giving effect to any of the
conflicts of law principles which would result in the application of the
substantive law of another jurisdiction. This Note shall not be interpreted or
construed with any presumption against the party causing this Note to be
drafted.
17
“THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN
THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE MAY BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.”
5.9
Consent to
Jurisdiction. Each of the Maker and the Holder irrevocably agrees that
the any legal action or proceeding arising out of or relating to this Note may
be brought in the Courts of New York County, New York or of the United States of
America for the Southern District of New York and hereby expressly submits to
the personal jurisdiction and venue of such courts for the purposes thereof and
expressly waives any claim of improper venue and any claim that such courts are
an inconvenient forum. Each of the Maker and the Holder hereby irrevocably
consents to the service of process of any of the aforementioned courts in any
such suit, action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, at the address in effect for notices to it
under the Purchase Agreement, such service to become effective 10 days after
such mailing. Nothing in this Section 5.9 shall affect or limit any right to
serve process in any other manner permitted by law. Each of the Maker and the
Holder hereby agree that the prevailing party in any suit, action or proceeding
arising out of or relating to this Note shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party. The Maker and the Holder
hereby waive all rights to trial by jury.
18
(a)
Except as otherwise specifically provided herein, the Maker
and all others that may become liable for all or any part of the obligations
evidenced by this Note, hereby waive presentment, demand, notice of nonpayment,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, and do hereby consent to
any number of renewals of extensions of the time or payment hereof and agree
that any such renewals or extensions may be made without notice to any such
persons and without affecting their liability herein and do further consent to
the release of any person liable hereon, all without affecting the liability of
the other persons, firms or Maker liable for the payment of this Note. No delay
or omission on the part of the Holder in exercising its rights under this Note,
or course of conduct relating hereto, shall operate as a waiver of such rights
or any other right of the Holder, nor shall any waiver by the Holder of any such
right or rights on any one occasion be deemed a waiver of the same right or
rights on any future occasion.
(b)
In the case of a dispute as to the determination of the
Closing Price or the VWAP or the arithmetic calculation of the Conversion
Prices, any adjustment to the Conversion Prices, liquidated damages amount,
interest or dividend calculation, or any redemption price, redemption amount,
adjusted Conversion Prices, or similar calculation, or as to whether a
subsequent issuance of securities is prohibited hereunder or would lead to an
adjustment to the Conversion Prices, the Maker shall submit the disputed
determinations or arithmetic calculations via facsimile within two (2) Business
Days of receipt, or deemed receipt, of the Conversion Notice, any redemption
notice, default notice or other event giving rise to such dispute, as the case
may be, to the Holder. If the Holder and the Maker are unable to agree upon such
determination or calculation within two (2) Business Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the
Maker shall, within two (2) Business Days submit via facsimile (a) the disputed
determination of the Closing Price or the VWAP to an independent, reputable
investment bank selected by the Maker and approved by the Holder, which approval
shall not be unreasonably withheld, (b) the disputed arithmetic calculation of
the Conversion Prices, adjusted Conversion Prices or any redemption price,
redemption amount or default amount to the Maker’s independent, outside
accountant or (c) the disputed facts regarding whether a subsequent issuance of
securities is prohibited hereunder or would lead to an adjustment to the
Conversion Prices (or any of the other above described facts not expressly
designated to the investment bank or accountant), to an expert attorney from a
nationally recognized outside law firm (having at least 100 attorneys and having
with no prior relationship with the Maker) selected by the Maker and approved by
the Lead Purchaser as defined in the Purchase Agreement). The Maker, at the
Maker’s expense, shall cause the investment bank, the accountant, the law firm,
or other expert, as the case may be, to perform the determinations or
calculations and notify the Maker and the Holder of the results no later than
five (5) Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s, accountant’s or attorney’s determination
or calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.
5.13
Additional
Definitions. Terms used herein and not defined shall have the meanings
set forth in the Purchase Agreement. For the purposes hereof, the
following terms shall have the following meanings:
“Closing Price” shall
mean (i) the last trading price per share of the Common Stock on such date on
the OTC Bulletin Board or a registered national stock exchange on which the
Common Stock is then listed, or if there is no such price on such date, then the
last trading price on such exchange or quotation system on the date nearest
preceding such date, or (ii) if the price of the Common Stock is not then
reported by the OTC Bulletin Board or a registered national securities exchange,
then the average of the “Pink Sheet” quotes for the relevant date, as reported
by the National Quotation Bureau, Inc., or (iii) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined
by the Holder and reasonably acceptable to the Maker.
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“Equity Conditions”
shall mean, during the period in question, (i) the Maker shall have duly honored
all conversions and redemptions scheduled to occur or occurring by virtue of one
or more Conversion Notices of the Holder, if any, (ii) all liquidated damages
and other amounts owing to the Holder in respect of this Note shall have been
paid; (iii) there is an effective Registration Statement pursuant to which the
Holder is permitted to utilize the prospectus thereunder to resell all of the
shares issuable pursuant to the Transaction Documents, whether by conversion or
exercise, forced conversion, in lieu of cash interest or otherwise (and the
Maker believes, in good faith, that such effectiveness will continue
uninterrupted for the foreseeable future), (iv) the Common Stock is trading on
the Trading Market and all of the shares issuable pursuant to the Transaction
Documents are listed for trading on a Trading Market (and the Maker believes, in
good faith, that trading of the Common Stock on a Trading Market will continue
uninterrupted for the foreseeable future), (v) there is a sufficient number of
authorized but unissued and otherwise unreserved shares of Common Stock for the
issuance of all of the shares issuable pursuant to the Transaction Documents,
(vi) there is then existing no Event of Default or event which, with the passage
of time or the giving of notice, would constitute an Event of Default, (vii) the
issuance of the shares in question (including shares of Common Stock as interest
hereunder) to the Holder would not violate the 4.99% or 9.99% beneficial
ownership limitations set forth in Section 3.4 hereof, and (viii) no public
announcement of a pending or proposed Triggering Event has
occurred.
“Investment” means,
with respect to any Person, all investments in any other Person, whether by way
of extension of credit, loan, advance, purchase of stock or other ownership
interest (other than ownership interests in such Person), bonds, notes,
debentures or other securities, or otherwise, and whether existing on the date
of this Agreement or thereafter made, but such term shall not include the cash
surrender value of life insurance policies on the lives of officers or
employees, excluding amounts due from customers for services or products
delivered or sold in the ordinary course of business.
“Trading Day” means
(a) a day on which the Common Stock is traded on the OTC Bulletin Board, or (b)
if the Common Stock is not traded on the OTC Bulletin Board, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided , however ,
that in the event that the Common Stock is not listed or quoted as set forth in
(a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.
“Trading Market” means
the Over the Counter Bulletin Board, the New York Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the
American Stock Exchange.
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“VWAP” means, for any
date, (i) the daily volume weighted average price of the Common Stock for such
date on the OTC Bulletin Board (or national securities exchange, if applicable)
as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then
listed or quoted on the OTC Bulletin Board (or national securities exchange, if
applicable) and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iii) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holder and reasonably acceptable to the
Maker.
[Signature
on following page]
21
NEOPROBE
CORPORATION
|
By:
/s/ Xxxxx X.
Xxxxxx
|
Its:
Vice-President, Finance &
CFO
|
22
EXHIBIT
A
XXXXXX’S
ACCOUNT INSTRUCTIONS
23