REGISTRATION RIGHTS AGREEMENT
Exhibit
10.4
THIS
REGISTRATION RIGHTS AGREEMENT (“Agreement”)
is
made July 3, 2007, by and among
Neoprobe
Corporation, a Delaware corporation (the “Company”),
Xxxxx
X. Xxxx, residing at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxx, Xxxx 00000, Xxxxxxx
X.
Xxxxxxx, residing at 0000 Xxxxxx Xxxxx, Xxxx, Xxxxxxxxxxxx 00000, and Xxxxxx
X.
Xxxx, residing at 0000 Xxxxxx Xxxxx Xxxxx, Xxxx, Xxxxxxxxxxxx 00000, as joint
tenants with right of survivorship (each an “Investor”
and
collectively “Investors”).
Recitals
A.
The
Company and the Investors are parties to the 10% Convertible Note Purchase
Agreement, dated July 3, 2007 (the “Purchase
Agreement”),
whereby Investors have purchased the Company’s 10% Convertible Note, due July 8,
2008 (the “Note”),
and a
warrant to purchase a total of 500,000 shares of the Company’s Common Stock (the
“Warrant”).
B.
In
order to induce the Company to enter into the Purchase Agreement and to induce
Investors to purchase the Note and Warrant pursuant to the Purchase Agreement,
Investors and the Company hereby agree that this Agreement shall govern the
rights of Investors or any permitted assignee to cause the Company to register
Common Stock issuable to Investors on conversion of the Note (the “Conversion
Shares”)
and
upon exercise of the Warrant (“Warrant
Shares”).
Statement
of Agreement
In
consideration of the mutual covenants contained herein and the consummation
of
the sale and purchase of the Note and Warrant pursuant to the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to
be legally bound hereby, agree as follows:
1. Definitions. For
purposes of this Agreement:
(a) “Commission”
shall
mean the Securities and Exchange Commission, or any other federal agency
at the
time administering the Securities Act
(b) “Common
Stock”
means
(a) the Company’s common stock, $.001 par value, as authorized on the date of
this Agreement, and (b) any other securities into which or for which any
of the
securities described in (a) may be converted or exchanged pursuant to a plan
of
recapitalization, reorganization, merger, sale of assets or
otherwise.
(c) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
1
(d) “Holder”
means
any holder of outstanding Registrable Securities or anyone who holds outstanding
Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance with this Agreement.
(e) “Initiating
Holders”
means,
collectively, Holders of at least fifty-one percent (51%) of the Registrable
Securities then outstanding.
(f) “Person”
means
any individual, corporation, partnership, trust, limited liability company,
association or other
entity.
(g) “Register,”
“registered”
and
“registration”
means
a
registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of
the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company
of
their intention to offer Registrable Securities.
(h) “Registrable
Securities”
means
all of the following (i) any and all Conversion Shares and Warrant Shares;
(ii)
stock issued in respect of stock referred to in clause (i) of this paragraph
in
any reorganization; or (iii) stock issued in respect of the stock referred
to in
clauses (i) or (ii) or this paragraph as a result of a stock split, stock
dividend, recapitalization or combination. Notwithstanding the foregoing,
Registrable Securities shall not include otherwise Registrable Securities
(x)
sold by a Person in a transaction in which his rights under this Agreement
are
not properly assigned; or (y) (A) sold to or through a broker or dealer
or
underwriter in a public distribution or a public securities transaction
that is
either registered under the Securities Act or is exempt from registration,
or
(B) sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if
any, are
removed upon the consummation of such sale, or (C) the registration rights
associated with such securities have been terminated pursuant to Section
13 of
this Agreement.
(i) “Rule
144”
means
Rule 144 promulgated by the Commission under the Securities Act.
(j) “Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
2. Demand
Registration.
(a)
If
the Company shall receive from Initiating Holders a written request that
the
Company effect any registration with respect to all or at least 50% in
the
aggregate of the issued and outstanding Registrable Securities held by
Initiating Holders, the Company shall:
(i)
promptly give written notice of the proposed registration to all other
Holders;
and
(ii)
as
soon as practicable use its reasonable best efforts to register (including,
without limitation, the execution of an undertaking to file post-effective
amendments and any other governmental requirements) all Registrable Securities
which the Holders request to be registered; provided,
however,
that the
Company shall not be obligated to file a registration statement pursuant
to this
Section 2:
(A)
prior
to September 31, 2007;
2
(B)
within 120 days following the effective date of any registered offering
of the
Company’s securities to the general public in which the Holders of Registrable
Securities shall have been able effectively to register all Registrable
Securities as to which registration shall have been requested;
(C)
in
any registration having an aggregate offering price (before deduction of
underwriting discounts and expenses of sale) of less than $1,000,000; or
(D)
after
the Company has effected one such registration pursuant to this Section
2 and
such registration has been declared or ordered effective, and the full
number of
Registrable Securities for which registration has been requested have been
included in the registration.
Subject
to the foregoing clauses (A) through (D), the Company shall file a registration
statement covering the Registrable Securities so requested to be registered
as
soon as practicable, but in any event within ninety (90) days after receipt
of
the request or requests of the Initiating Holders and shall use reasonable
best
efforts to have such registration statement promptly declared effective
by the
Commission; provided,
however,
that if
the Company shall furnish to such Holders a certificate signed by the Chairman
of the Board of Directors of the Company stating that in the good faith
judgment
of the Board of Directors, with advice of counsel, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed within such ninety-day (90-day) period and it is therefore
essential
to defer the filing of such registration statement, the Company shall have
an
additional period of not more than ninety (90) days after the expiration
of the
initial ninety-day (90-day) period within which to file such registration
statement; provided, that during such time the Company may not file a
registration statement for securities to be issued and sold for its own
or
anyone else’s account; and further
provided,
that
during such deferment, the Initiating Holders may elect not to pursue such
registration request, in which event, upon giving notice to the Company
of such
decision prior to the declaration of effectiveness of any such registration
statement, the Initiating Holders shall not be deemed to have availed themselves
of the demand registration right herein provided for.
(b)
If
the Initiating Holders intend to distribute the Registrable Securities
covered
by their request by means of an underwriting, they shall so advise the
Company
as a part of their request. In such event, the Company shall include such
information in the written notice referred to in Section 2(a)(i). In either
such
event, if so requested in writing by the Company, the Initiating Holders
shall
negotiate with an underwriter selected by the Company with regard to the
underwriting of such requested registration; provided,
however,
that if
a majority in interest of the Initiating Holders have not agreed with such
underwriter as to the terms and conditions of such underwriting within
twenty
(20) days following commencement of such negotiations, a majority in interest
of
the Initiating Holders may select an underwriter of their choice. The right
of
any Holder to registration pursuant to Section 2 shall be conditioned upon
such
Holder’s participation in such underwriting. The Company shall (together with
all Holders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter
or
underwriters selected for such underwriting. Notwithstanding any other
provision
of this Section 2, if the managing underwriter advises the Initiating Holders
in
writing that marketing factors require a limitation of the number of shares
to
be underwritten, the Company shall so advise all Holders, and the number
of
shares of Registrable Securities that may be included in the registration
and
underwriting shall be allocated among all Holders thereof in proportion,
as
nearly as practicable, to the respective amounts of Registrable Securities
held
by such Holders; provided,
however, that
securities to be included in such registration statement as a result of
piggyback registration rights as well as any securities to be offered by
the
Company, its officers and employees shall be excluded from the registration
statement prior to the exclusion of any Registrable Securities held by
the
Holders. If any Holder disapproves of the terms of the underwriting, such
Holder
may elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Holders. If, by the withdrawal of such
Registrable Securities, a greater number of Registrable Securities held
by other
Holders may be included in such registration (up to the limit imposed by
the
underwriters) the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the limitation
as set forth above. Any Registrable Securities which are excluded from
the
underwriting by reason of the underwriter’s marketing limitation or withdrawn
from such underwriting shall be withdrawn from such registration.
3
3. Piggyback
Registration.
(a)
If at
any time or from time to time, the Company shall determine to register
any of
its securities, for its own account or the account of any of its stockholders,
other than a registration pursuant to Section 2 or Section 4, a registration
relating solely to employee benefit plans, a registration relating solely
to an
SEC Rule 145 transaction, a transaction relating solely to the sale of
debt or
convertible debt instruments, or a post-effective amendment to any registration
statement that became effective prior to the date of the Purchase Agreement,
or
a new registration statement that relates to the same securities that were
the
subject of such previously effective registration statement, the Company
will:
(i)
give
to each Holder written notice thereof as soon as practicable prior to filing
the
registration statement; and
(ii)
include in such registration and in any underwriting involved therein,
all the
Registrable Securities specified in a written request or requests, made
within
fifteen (15) days after receipt of such written notice from the Company,
by any
Holder or Holders, except as set forth in subsection (b) below.
(b)
If
the registration is for a registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written notice
given
pursuant to Section 3(a)(i). In such event, the right of any Holder to
registration pursuant to Section 3 shall be conditioned upon such Holder’s
participation in such underwriting. All Holders proposing to distribute
their
securities through such underwriting shall (together with the Company and
the
other holders distributing their securities through such underwriting)
enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any
other provision of this Section 3, if the managing underwriter determines
that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting, or may
exclude
Registrable Securities entirely from such registration if the registration
is
the first registered offering for the sale of the Company’s securities to the
general public (provided that there is first excluded from such registration
and
underwriting all shares held by officers, directors or employees of the
Company
or any subsidiary, any holder thereof not having any such contractual incidental
registration rights and any holder having contractual, incidental registration
rights subordinate and junior to the rights of the Holders of Registrable
Securities). The Company shall so advise all Holders and the other holders
distributing their securities through such underwriting pursuant to piggyback
registration rights similar to this Section 3, and the number of shares
of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among all Holders and
other
holders (subject to the limitations set forth above) in proportion, as
nearly as
practicable, to the respective amounts of Registrable Securities held by
such
Holders and other securities held by other holders at the time of filing
the
registration statement. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice
to
the Company and the managing underwriter. If, by the withdrawal of such
Registrable Securities, a greater number of Registrable Securities held
by other
Holders may be included in such registration (up to the limit imposed by
the
underwriters), the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities. Any Registrable Securities excluded or withdrawn
from
such underwriting shall be withdrawn from such registration.
4
4. Form
S-3.
(a)
From
and after such time as Form S-3 is available to the Company for the registration
of secondary offerings for the account of any person other than the issuer,
Holders shall have the right at any time to request registrations on Form
S-3
(or any similar form), provided that such requests shall be in writing
and shall
state the number of shares of Registrable Securities to be disposed of
and the
intended method of disposition of shares by such Holders. As soon as
practicable, the Company will file such registration statement and use
its
reasonable best efforts to have such registration statement declared effective,
provided,
however,
that the
Company shall not be obligated to effect such registration:
(i)
within ninety (90) days of the effective date of any registration referred
to in
Sections 2 and 3 above;
(ii)
unless the Holder or Holders requesting registration propose to dispose
of
shares of Registrable Securities at an aggregate price to the public (before
deduction of underwriting discounts and expenses of sale) of at least $250,000.
(iii)
if
the Company shall furnish to the Holders a certificate signed by the Chairman
of
the Board of Directors of the Company stating that in the good faith and
reasonable judgment of the Board of Directors of the Company, with advice
of
counsel, it would be seriously detrimental to the Company and its stockholders
for such Form S- 3 registration to be effected at such time, in which event
the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than sixty (60) days after receipt of
the
request of the Holder or Holders under this Section 2.3; provided, that
such
right to delay a request shall be exercised by the Company not more than
once in
any twelve (12) month period; or
(iv)
if
the Company has been required to file two registration statements pursuant
to
this Section 4 within the twelve-month period preceding the
request.
5
(b)
The
Company shall give written notice to all Holders of Registrable Securities
of
the receipt of a request for registration pursuant to this Section 4 and
shall
provide a reasonable opportunity for other Holders to participate in the
registration; provided,
however,
that if
the registration is for an underwritten offering, the following terms shall
apply to all participants in such offering: The right of any Holder to
registration pursuant to Section 4 shall be conditioned upon such Holder’s
participation in such underwriting. All Holders proposing to distribute
their
securities through such underwriting shall (together with the Company and
the
other Holders distributing their securities through such underwriting)
enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding
any
other provision of this Section 4, if the managing underwriter determines
that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting. The Company
shall so advise all Holders of Registrable Securities which would otherwise
be
registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among the Holders in proportion, as nearly as practicable,
to
the respective amounts of securities requested by such Holders to be included
in
such registration. If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. If, by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders
may
be included in such registration (up to the limit imposed by the underwriters),
the Company shall offer to all Holders who have included Registrable Securities
in the registration the right to include additional Registrable Securities
in
the same proportion used in determining the limitation as set forth above.
Any
Registrable Securities excluded or withdrawn from such underwriting shall
be
withdrawn from such registration. Subject to the foregoing, the Company
will use
its reasonable best efforts to effect promptly the registration of all
shares of
Registrable Securities on Form S-3 to the extent requested by the Holder
or
Holders thereof for purposes of disposition.
5. Expenses
of Registration.
In
addition to the fees and expenses contemplated by Section 6 hereof, all
expenses
incurred in connection with one registration pursuant to Section 2 hereof
and
all registrations pursuant to Sections 3 and 4 hereof, including without
limitation all Securities
and Exchange Commission and National Association of Securities Dealers,
Inc.
registration, filing and qualification fees and expenses, “blue-sky” fees and
expenses, printing expenses, transfer agent fees and expenses, and fees
and
disbursements of counsel for the Company and a single counsel for all Holders,
and expenses of any special audits of the Company’s financial statements
incidental to or required by such registration, shall be borne by the Company,
except that the Company shall not be required to pay underwriters’ fees,
discounts or commissions relating to Registrable Securities or fees of
a
separate legal counsel of a Holder other than the counsel described above.
6
6. Registration
Procedures.
In the
case of each registration effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing
as to
the initiation of each registration and as to the completion thereof. At
its
expense the Company will:
(a)
keep
such registration pursuant to Sections 2, 3 and 4 continuously effective
for
periods of one hundred twenty (120), ninety (90) and ninety (90) days,
respectively, or, in each case, such reasonable period necessary to permit
the
Holder or Holders to complete the distribution described in the registration
statement relating thereto, whichever first occurs, provided,
however,
that in
any registration pursuant to Section 3 the registration as to the Registrable
Securities included therein shall remain effective for the period of
effectiveness of the registration statement if greater than 90
days;
(b)
promptly prepare and file with the Commission such amendments and supplements
to
such registration statement and the prospectus used in connection therewith
as
may be necessary to comply with the provisions of the Securities Act, and
to
keep such registration statement effective for that period of time specified
in
Section 6(a) above;
(c)
permit the Holder or Holders to review and comment upon the registration
statement and all amendments and supplements thereto at least two Business
Days
prior to their filing with the Commission;
(d)
furnish the Holder or Holders (i) promptly after the same is prepared and
filed
with the Commission, at least one copy of the registration statement and
any
amendment(s) thereto, including financial statements and schedules, and
all
exhibits, and (ii) upon the effectiveness of any registration statement,
one
copy of the prospectus included in such registration statement and all
amendments and supplements thereto (or such other number of copies as the
Holder
or Holders may reasonably request);
(e)
furnish such number of prospectuses and other documents incident thereto
as a
Holder from time to time may reasonably request;
(f)
use
reasonable best efforts to obtain the withdrawal of any order suspending
the
effectiveness of a registration statement, or the lifting of any suspension
of
the qualification of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment;
(g)
register or qualify such Registrable Securities for offer and sale under
the
securities or blue sky laws of such jurisdictions as any Holder or underwriter
reasonably requires, and keep such registration or qualification effective
during the period set forth in Section 6(a) above; provided;
however, that
the
Company shall not be obligated to qualify to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject
it
to the service of process in suits other than those arising out of the
offer or
sale of the securities covered by the registration statement in any jurisdiction
where it is not then so subject
7
(h)
cause
all Registrable Securities covered by such registrations to be listed on
each
securities exchange, on which similar securities issued by the Company
are then
listed or, if no such listing exists, use reasonable best efforts to list
all
Registrable Securities on one of the New York Stock Exchange, the American
Stock
Exchange or the Nasdaq Stock Market;
(i)
cause
its accountants to issue to the underwriter, if any, or the Holders, if
there is
no underwriter, comfort letters and updates thereof, in customary form
and
covering matters of the type customarily covered in such letters with respect
to
underwritten offerings;
(j)
enter
into such customary agreements (including underwriting agreements in customary
form) and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably,
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);
(k)
make
available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by any
such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant
or
agent in connection with such registration statement;
(l)
if
the offering is underwritten, at the request of any Holder of Registrable
Securities to furnish on the date that Registrable Securities are delivered
to
the underwriters for sale pursuant to such registration: (i) an opinion
dated
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such Holder, stating
that
such registration statement has become effective under the Securities Act
and
that (A) to the best knowledge of such counsel, no stop order suspending
the
effectiveness thereof has been issued and no proceedings for that purpose
have
been instituted or are pending or contemplated under the Securities Act,
(B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements
of the
Securities Act (except that such counsel need not express any opinion as
to
financial statements or other financial data contained therein), and (C)
to such
other effects as reasonably may be requested by counsel for the underwriters
or
by such Holder or its counsel; and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion
of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the
period ending no more than five business days prior to the date of such
letter)
with respect to such registration as such underwriters or such seller reasonably
may request;
(m)
notify each Holder, at any time a prospectus covered by such registration
statement is required to be delivered under the Securities Act, of the
happening
of any event of which it has knowledge as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue
statement of a material fact or omits to state a material fact required
to be
stated therein or necessary to make the statements therein not misleading
in the
light of the circumstances then existing;
8
(n)
use
its reasonable efforts to insure the obtaining of all necessary approvals
from
the National Association of Securities Dealers, Inc.; and
(o)
otherwise use its reasonable efforts to comply with all applicable rules
and
regulations of the Commission.
7. Indemnification.
(a)
In
the event of a registration of any of the Registrable Securities under
the
Securities Act pursuant to Sections 2, 3 or 4, the Company will indemnify
and
hold harmless each Holder of such Registrable Securities (including their
officers, directors, affiliates, members, partners and managers) thereunder,
each underwriter of such Registrable Securities thereunder and each other
Person, if any, who controls such Holder or underwriter within the meaning
of
the Securities Act, against any losses, claims, damages or liabilities,
joint or
several, to which such Holder, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act or any filing with any state securities
commission or agency, any preliminary or amended prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out
of or
are based upon the omission or alleged omission to state therein a material
fact
required to be stated therein or necessary to make the statements therein
not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or any state securities law or regulation
applicable to the Company and relating to action or inaction required of
the
Company in connection with any such registration, and will reimburse each
such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls
any
such underwriter, for any reasonable legal and any other expenses incurred
in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, provided that the Company will not be liable
in any
such case to the extent that any such claim, loss, damage or liability
arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by
such
Holder or underwriter specifically for use therein.
(b)
Each
Holder will, if Registrable Securities held by or issuable to such Holder
are
included in the securities as to which such registration is being effected,
indemnify and hold harmless the Company, each of its directors and officers,
each underwriter, if any, of the Company’s securities covered by such a
registration statement, each person who controls the Company and each
underwriter within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors, affiliates, members, partners
and
managers, and each person controlling such Holder, against all claims,
losses,
expenses, damages and liabilities (or actions in respect thereof) arising
out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering
circular
or other document, or any omission (or alleged omission) to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, persons or underwriters for any reasonable
legal
or any other expenses incurred in connection with investigating, defending
or
settling any such claim, loss, damage, liability or action, in each case
to the
extent, but only to the extent, that such untrue statement (or alleged
untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance
upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Holder specifically for use therein; provided, however,
the total amount for which any Holder, its officers, directors, affiliates,
members, partners and managers, and any person controlling such Holder,
shall be
liable under this Section 7(b) shall not in any event exceed the aggregate
proceeds received by such Holder from the sale of Registrable Securities
sold by
such Holder in such registration.
9
(c)
Each
party entitled to indemnification under this Section 7 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claims
as to
which indemnity may be sought, and shall permit the Indemnifying Party
to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense
of such
claim or litigation, shall be approved by the Indemnified Party (whose
approval
shall not be unreasonably withheld), and the Indemnified Party may participate
in such defense at such party’s expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not relieve
the
Indemnifying Party of its obligations hereunder, but such failure shall
so
relieve the Indemnifying Party to
the
extent that such failure materially prejudices the Indemnifying Party’s ability
to defend such claim or litigation.
No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of
any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified
Party
of a release from all liability in respect of such claim or litigation.
(d) Notwithstanding
anything else herein to the contrary, the
foregoing indemnity agreements of the Company and the selling Holders are
subject to the condition that, insofar as they relate to any damages arising
from any untrue statement or alleged untrue statement of a material fact
contained in, or omission or alleged omission of a material fact from,
a
preliminary prospectus (or necessary to make the statements therein not
misleading) that has been corrected in the form of prospectus included
in the
registration statement at the time it becomes effective, or any amendment
or
supplement thereto filed with the Commission pursuant to Rule 424(b) under
the
Securities Act, such indemnity agreement shall not inure to the benefit
of any
Person if a copy of such prospectus was furnished to the Indemnified Party
and
such Indemnified Party failed to deliver, at or before the confirmation
of the
sale of the shares registered in such offering, a copy of such prospectus
to the
Person asserting the loss, liability, claim, or damage in any case in which
such
delivery was required by the Securities Act.
(e)
Notwithstanding the foregoing, to the extent that the provisions on
indemnification contained in the underwriting agreements entered into among
the
selling Holders, the Company and the underwriters in connection with the
underwritten public offering are in conflict with the foregoing provisions,
the
provisions in the underwriting agreement shall be controlling as to the
Registrable Securities included in the public offering.
10
(f)
If
the indemnification provided for in this Section 7 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party with respect
to
any loss, liability, claim, damage or expense referred to therein, to
provide for just and equitable contribution to joint liability under the
Securities Act, the
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
shall contribute to the amount paid or payable by such Indemnified Party
as a
result of such loss, liability, claim, damage or expense in such proportion
as
is appropriate to reflect the relative fault of the Indemnifying Party
on the
one hand and of the indemnified party on the other hand in connection with
the
statements or omissions which resulted in such loss, liability, claim,
damage or
expense as well as any other relevant equitable considerations. The relevant
fault of the Indemnifying Party and the Indemnified Party shall be determined
by
reference to, among other things, whether the untrue or alleged untrue
statement
of a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party
and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Notwithstanding the foregoing,
the amount any Holder shall be obligated to contribute pursuant to this
Section
7(f) shall be limited to an amount equal to the proceeds to such Holder
of the
Registrable Securities sold pursuant to the registration statement which
gives
rise to such obligation to contribute (less the aggregate amount of any
damages
which the Holder has otherwise been required to pay in respect of such
loss,
claim, damage, liability or action or any substantially similar loss, claim,
damage, liability or action arising from the sale of such Registrable
Securities). No person or entity guilty of fraudulent misrepresentation
(within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity that was not guilty of such fraudulent
misrepresentation.
(g)
The
indemnification provided by this Section 7 shall be a continuing right
to
indemnification and shall survive the registration and sale of any securities
by
any Person entitled to indemnification hereunder and the expiration or
termination of this Agreement.
8. Lock
Up Agreement.
In
consideration for the Company agreeing to its obligations under this Agreement,
each Holder agrees in connection with any registration of the Company’s
securities (whether or not such Holder is participating in such registration)
upon the request of the Company and the underwriters managing any underwritten
offering of the Company’s securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any Registrable
Securities (other than those included in the registration) without the
prior
written consent of the Company or such underwriters, as the case may be,
for
such period of time (not to exceed 90 days) from the effective date of
such
registration as the Company and the underwriters may specify, so long as
all
Holders, Persons participating in such registration (other than as to shares
that are included in the registration statement), stockholders holding
more than
one percent (1%) of the outstanding Common Stock and all officers and directors
of the Company are bound by a comparable obligation. The
underwriters in connection with such registration
are
intended third-party beneficiaries of this Section 8
and
shall have the right, power, and authority to enforce the provisions hereof
as
though they were a party hereto.
11
9. Information
From Holder: Suspension of Sales.
The
Holder or Holders of Registrable Securities included in any registration
shall
promptly furnish to the Company such information regarding such Holder
or
Holders and the distribution proposed by such Holder or Holders as the
Company
may reasonably request in writing and as shall be required in connection
with
any registration referred to herein. Each Holder shall suspend further
sales
pursuant to any registration statement upon receipt of a notice from the
Company
pursuant to Section 6(m) hereof, and the Company determines that it is
necessary
or advisable to amend or supplement the prospectus. The Company may suspend
not
more than twice in any twelve (12) months for not more than thirty (30)
days
10. Rule
144 Reporting.
With
a
view to making available to Holders of Registrable Securities the benefits
of
Rule 144, until the later of the date on which the Warrants have been fully
exercised or have expired or the payment in full of the Note, the Company
agrees
to: (a) make and keep public information available, as those terms are
understood and defined in Rule 144; (b) use its reasonable best efforts
to file
with the Commission in a timely manner all reports and other documents
required
of the Company under the Securities Act and the Exchange Act; and (c) furnish
to
each Holder of Registrable Securities upon request a written statement
by the
Company as to its compliance with
the
reporting requirements of Rule 144, the Securities Act, and the Exchange
Act.
11. Transfer
of Registration Rights.
The
rights under this Agreement
may
be assigned
(but
only
with all related obligations)
by
a
Holder to any permitted transferee of the Note or the Warrant.
The
terms and conditions of this Agreement inure to the benefit of and are
binding
upon the respective successors and permitted assignees of the parties.
Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and permitted
assignees any rights, remedies, obligations or liabilities under or by
reason of
this Agreement, except as expressly provided herein.
12. Termination
of Registration Rights. The
right
of any Holder to request registration or inclusion of Registrable Securities
in
any registration pursuant to Sections
2, 3 or 4
shall
terminate when
all
of such Holder’s Registrable Securities could be sold without restriction under
SEC Rule 144(k).
13. Miscellaneous.
(a)
Successors
and Assigns.
The
terms and conditions of this Agreement inure to the benefit of and are
binding
upon the respective successors and permitted assignees of the parties.
Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and permitted
assignees any rights, remedies, obligations or liabilities under or by
reason of
this Agreement, except as expressly provided herein.
A Person
is deemed to be a holder of Registrable Securities whenever such Person
owns or
is deemed to own of record such Registrable Securities. If the Company
receives
conflicting instructions, notices or elections from two or more Persons
with
respect to the same Registrable Securities, the Company shall act upon
the basis
of instructions, notice or election received from the registered owner
of such
Registrable Securities
12
(b)
Governing
Law.
The
corporate laws of the State of Delaware shall govern all issues concerning
the
relative rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of
this
Agreement shall be governed by the internal laws of the State of Ohio,
without
giving effect to any choice of law or conflict of law provision or rule
(whether
of the State of Ohio or any other jurisdictions) that would cause the
application of the laws of any jurisdiction other than the State of Ohio.
Each
party hereby irrevocably waives personal service of process and consents
to
process being served in any such suit, action or proceeding by mailing
a copy
thereof to such party at the address for such notices to it under this
Agreement
and agrees that such service shall constitute good and sufficient service
of
process and notice thereof. Nothing contained herein shall be deemed to
limit in
any way any right to serve process in any manner permitted by law. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the
validity
or enforceability of the remainder of this Agreement in that jurisdiction
or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(c)
Counterparts;
Facsimile.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and
the same
instrument. This Agreement may also be executed and delivered by facsimile
signature and in two or more counterparts, each of which shall be deemed
an
original, but all of which together shall constitute one and the same
instrument.
(d)
Titles
and Subtitles.
The
titles and subtitles used in this Agreement are for convenience only and
are not
to be considered in construing or interpreting this Agreement.
(e)
Notices.
All
notices and communications provided for hereunder shall be in writing and
sent
(i) 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 (ii) by
registered or certified mail with return receipt requested (postage prepaid),
or
(iii) 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
13
or
to
such other Person at such other place as the Company shall designate to
Investors in writing;
(B) if
to
Investors, to
Xxxxx
X.
Xxxx
0000
Xxxxx Xxxxx Xxxxx
Xxxxxx,
Xxxx 00000
copy
to:
Xxxxxxx
X. Xxxxxx, Esq.
0000
Xxxxxx Xxxxxxx
Xxxxxx,
Xxxx 00000
or
at
such other address as Investors shall designate to the Company in writing;
or
(C) if
to any
permitted transferee or transferees of Investors, 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.
(f)
Amendments
and Waivers.
Any term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance,
and
either retroactively or prospectively) only with the written consent of
the
Company and the holders of a majority of the Registrable Securities then
outstanding;
and
provided further that any provision hereof may be waived by any waiving
party on
such party’s own behalf, without the consent of any other party.
Any
amendment, termination, or waiver effected in accordance with this Section
13(f)
shall be binding on all parties hereto, regardless of whether any such
party has
consented thereto. No waivers of or exceptions to any term, condition,
or
provision of this Agreement, in any one or more instances, shall be deemed
to be
or construed as a further or continuing waiver of any such term, condition,
or
provision.
(g)
Severability.
In case
any one or more of the provisions contained in this Agreement is for any
reason
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision of
this
Agreement, and such invalid, illegal, or unenforceable provision shall
be
reformed and construed so that it will be valid, legal, and enforceable
to the
maximum extent permitted by law.
(i)
Entire
Agreement.
This
Agreement, together with the Purchase Agreement, the Note and the Warrant,
constitutes the full and entire understanding and agreement among
the
parties with respect to the subject matter hereof, and any other written
or oral
agreement relating to the subject matter hereof existing between the parties
is
expressly canceled.
14
(j)
Dispute
Resolution.
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 13(j) 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 13(j) 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 13(j)) 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
13(j) 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.
(k)
Delays
or Omissions.
No
delay or omission to exercise any right, power, or remedy accruing to any
party
under this Agreement, upon any breach or default of any other party under
this
Agreement, shall impair any such right, power, or remedy of such nonbreaching
or
nondefaulting party, nor shall it be construed to be a waiver of or acquiescence
to any such breach or default, or to any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be deemed
a
waiver of any other breach or default theretofore or thereafter occurring.
All
remedies, whether under this Agreement or by law or otherwise afforded
to any
party, shall be cumulative and not alternative.
(l)
No
Strict Construction.
The
parties hereto have participated jointly in the negotiation and drafting
of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises under any provision of this Agreement, this Agreement shall be construed
as if drafted jointly by the parties thereto, and no presumption or burden
of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
15
(m)
No
Subordination of Registration Rights.
After
the date of this Agreement, the Company will not grant to any Person any
registration rights which would preclude the Investors from participating
in any
subsequent registration pursuant to any right granted in this
Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
written above.
[Signatures
on following pages]
16
| COMPANY: | ||
| Neoprobe Corporation | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Xxxxx
X. Xxxxxx,
Vice
President -- Finance
|
||
| INVESTORS: | ||
| |
|
|
| /s/ Xxxxx X. Xxxx | ||
|
Xxxxx X. Xxxx |
||
| /s/ Xxxxxxx X. Xxxxxxx | ||
|
Xxxxxxx X. Xxxxxxx |
||
| /s/ Xxxxxx X. Xxxx | ||
|
Xxxxxx
X. Xxxx,
by
Xxxxx X. Xxxx, his attorney in fact, under power of attorney
dated April
22, 2005
|
||
Signature
page to Registration Rights Agreement
18
