Exhibit 10.3
AMENDMENT 2 TO THE RIGHTS AGREEMENT
This Amendment 2 ("Amendment") to the Rights Agreement ("Agreement")
between Neoprobe Corporation, a Delaware corporation ("Company"), and
Continental Stock Transfer & Trust Company ("Rights Agent") is dated effective
December 13, 2004.
WHEREAS, the Company and the Rights Agent entered into the Agreement on
July 18, 1995 in connection with a rights dividend declared by the board of
directors of the Company; and
WHEREAS, the Agreement was amended effective February 16, 1999 to
facilitate the sale of Series B Convertible Preferred Stock and Class L
Warrants, none of which are any longer outstanding as of the date of this
Amendment; and
WHEREAS, the Company and the Rights Agent desire to amend the Agreement
in order to delete references associated with the Series B Convertible Preferred
Stock and Class L Warrants, and to accommodate the sale and issuance of
convertible promissory notes of the Company and warrants to purchase common
stock of the Company, par value $.001, in order to raise funds for the Company;
NOW THEREFORE, the Company and the Rights Agent hereby agree to amend
the Agreement as follows:
1. The definition of "Acquiring Person" contained in Section 1.(a) of
the Agreement is hereby deleted in its entirety and the following language be
inserted in lieu thereof:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary of the
Company, (iv) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan, or (v) any
Person who becomes a Beneficial Owner of 15% or more of the Common
Stock then outstanding solely by reason of such Person or its
affiliates and associates (1) acquiring one or more of the Company's 8%
Series A Convertible Promissory Notes due December 12, 2008 ("Series A
Notes"), (2) acquiring Series T Warrants of the Company ("Series T
Warrants"), (3) acquiring Common Stock through the conversion of Series
A Notes or the exercise of Series T Warrants, or (4) acquiring Common
Stock in respect of the Series A Notes or Series T Warrants, in each
case pursuant to the respective terms thereof or pursuant to any
provision of the Securities Purchase Agreement ("Purchase Agreement")
dated December 13, 2004 by and among the Company, Biomedical Value
Fund, a Delaware limited partnership, Biomedical Offshore Value Fund,
Ltd., an exempted company incorporated under the provisions of the
Companies Law of the Cayman Islands, and Xxxxx X. Xxxx.
2. Section 11(a)(ii) of the Agreement is hereby deleted in its entirety
and the following language be inserted in lieu thereof:
Section 11. (a)(ii) If any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of
any such plan), alone or together with its Affiliates and Associates at
any time after the Rights Dividend Declaration Date, becomes a
Beneficial Owner of 15% or more of the Common Stock then outstanding, a
"Section 11(a)(ii) Event" shall be deemed to have occurred; unless the
event causing the 15% threshold to be crossed:
(1) is a Section 13 Event;
(2) is an acquisition of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding Common Stock at
a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates
or Associates of an Acquiring Person, after receiving advice
from one or more investment banking firms, to be (A) at a
price which is fair to stockholders (taking into account all
factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably
be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (B)
otherwise in the best interests of the Company and its
stockholders; or
(3) is (i) the acquisition of Series A Notes, (ii) the
acquisition of Series T Warrants, (iii) the purchase of Common
Stock through the conversion of Series A Notes, the exercise
of Series T Warrants, (iv) the acquisition of Common Stock in
respect of the Series A Notes or Series T Warrants, in each
case pursuant to the respective terms thereof or pursuant to
any provision of the Purchase Agreement.
Promptly following the first occurrence of any Section 11(a)(ii) Event,
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of
Preferred Stock or fractions thereof, such number of shares of Common
Stock of the Company as shall equal the result obtained by (I)
multiplying the then current Purchase Price by the then number of
shares of Preferred Stock or fractions thereof for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (II) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of
the current market price (determined pursuant to Section 11(d) hereof)
per shares of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Stock").
3. Except as specifically amended by this Amendment, the provisions of
the Agreement remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
NEOPROBE CORPORATION
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, Vice President
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