SECURITIES PURCHASE AGREEMENT
Exhibit 10.1
This SECURITIES PURCHASE AGREEMENT dated as of December 26, 2007 (this “Agreement”) by
and among Neoprobe Corporation, a Delaware corporation (the “Company”), and
Platinum-Montaur Life Sciences, LLC, a Delaware limited liability company (the
“Purchaser”).
Recital
The Company wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the
Company (a) the Company’s 10% Series A Convertible Senior Secured Promissory Note in the principal
amount of $7,000,000, due December 26, 2011 (the “Series A Note”), (b) the Company’s 10%
Series B Convertible Senior Secured Promissory Note in the principal amount of $3,000,000, due
December 26, 2011 (the “Series B Note”), (c) 3,000 shares of the Company’s 8% Series A
Convertible Preferred Stock (the “Preferred Stock”), (d) the Company’s Series W Warrant to
purchase shares of common stock of the Company (the “Series W Warrant”), (e) the Company’s
Series X Warrant to purchase shares of common stock of the Company (the “Series X
Warrant”), and (e) the Company’s Series Y Warrant to purchase shares of common stock of the
Company (the “Series Y Warrant”), in each case upon the terms and subject to the conditions
hereinafter set forth.
Statement of Agreement
In consideration of the mutual covenants and agreements set forth herein and for other good
and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties
hereto agree as follows.
ARTICLE I
DEFINITIONS
1.1 General Definitions. As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
“2004 Notes” shall mean the Company’s Series A Convertible Promissory Notes, dated
December 13, 2004, issued to Biomedical Value Fund, L.P., Biomedical Offshore Value Fund, Ltd. and
Xxxxx X. Xxxx.
“Account Control Agreement” shall mean the Blocked Account Control Agreement among
U.S. Bank National Association, the Purchaser and the Company, substantially in the form of
Exhibit A hereto.
“Affiliate” shall mean, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such Person. For the purposes
of this definition, “control,” when used with respect to any Person, means the possession,
direct or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms of “affiliated,” “controlling” and “controlled”
have meanings correlative to the foregoing.
“Agreement” shall mean this Agreement, including the exhibits and schedules attached
hereto, as the same may be amended, supplemented or modified in accordance with the terms hereof.
“Board” shall mean the Board of Directors of the Company.
“Business 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 generally are
authorized or required by law or other government actions to close.
“By-laws” shall mean, unless the context in which such term is used otherwise
requires, the By-laws of the Company or any of its Subsidiaries as in effect on a Closing Date.
“Certificate of Designations” shall mean the Certificate of Powers, Designations,
Preferences and Rights of the Preferred Stock, substantially in the form attached hereto as Exhibit
B.
“Certificate of Incorporation” shall mean, unless the context in which it is used
shall otherwise require, the Certificate of Incorporation of the Company or any of its Subsidiaries
as in effect on a Closing Date.
“Closing Date” shall mean the date of the First Closing, the date of the Second
Closing, or the date of the Third Closing, as the context may require.
“Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor
statute thereto.
“Commission” shall mean the Securities and Exchange Commission or any similar agency
then having jurisdiction to enforce the Securities Act.
“Common Stock” shall mean the Company’s common stock, par value $.001 per share, or
any other capital stock of the Company into which such stock is reclassified or reconstituted.
“Contractual Obligations” shall mean as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument or arrangement (whether in writing or otherwise) to which such Person is
a party or by which it or any of such Person’s property is bound.
“Conversion Shares” shall mean the shares of Common Stock issuable upon conversion of
the Notes and the Preferred Stock in accordance with their respective terms
“Event of Default” shall have the meaning assigned to such term in the Notes.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.
“First Closing” and “First Closing Date” shall have the respective meanings
assigned to such terms in Section 2.2(a).
“GAAP” shall mean generally accepted accounting principles in effect within the United
States, consistently applied.
“Governmental Authority” shall mean the government of any nation, state, city,
locality or other political subdivision of any thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to government,
regulation or compliance, and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
“Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in
excess of an aggregate of $50,000; (b) other obligations evidenced by bonds, debentures, notes or
similar instruments and all reimbursement or other obligations in respect of letters of credit,
bankers’ acceptances, swap or hedging agreements or other financial products in excess, in the
aggregate, of $50,000, (c) all guaranties, endorsements and other contingent obligations in respect
of Indebtedness of others, whether or not the same are or should be reflected in the Company’s or a
Subsidiary’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business;
and (d) the present value of any lease payments in excess of $50,000, in the aggregate, due under
leases required to be capitalized in accordance with GAAP.
“Intercreditor Agreement” shall mean the Intercreditor Agreement among the Company,
the Purchaser, Xxxxx Xxxx, Xxxxxxx X. Xxxxxxx and Xxxxxx Xxxx to be entered into on the First
Closing Date.
“IP Security Agreement” shall mean the Patent, Trademark and Copyright Security
Agreement delivered by each of the Company and the Subsidiaries, substantially in the form attached
hereto as Exhibit C.
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), charge, claim, restriction or preference, priority, right
or other security interest or preferential arrangement of any kind or nature whatsoever (excluding
preferred stock and equity related preferences) including, without limitation, those created by,
arising under or evidenced by any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease Obligation, or any financing lease having substantially the same
economic effect as any of the foregoing.
“Lymphoseek” means the Company’s proprietary radiopharmaceutical in development that
is specifically designed and labeled for the targeting of lymphatic tissue, generally known as
Lymphoseek®.
“Material Adverse Effect” shall mean a material adverse effect on, or a material
adverse change in, or a group of such effects on or changes in (i) the assets, business,
properties, prospects, operations, or financial condition of the Company and its Subsidiaries,
taken as a whole, or (ii) the ability of the Company to perform its obligations under this
Agreement.
“Material Contracts” has the meaning set forth in Section 3.20.
“Notes” shall mean the Series A Notes and the Series B Notes.
“Permitted Encumbrances” shall mean:
(a) Liens for Taxes, assessments or other governmental charges which are not yet due and
payable or which are being contested in good faith with a reserve or other appropriate provision
having been made therefor;
(b) Liens of landlords, carriers, warehousemen, mechanics, materialmen and other similar liens
imposed by law, which are incurred in the ordinary course of business for sums not more than thirty
(30) days delinquent or which are being contested in good faith; provided that a reserve or other
appropriate provision shall have been made therefor and the aggregate amount of such Liens is less
than $100,000;
(c) Liens incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money);
(d) Deposits in an aggregate amount not to exceed $100,000, made in the ordinary course of
business to secure liability to insurance carriers;
(e) Leases or subleases granted to others not interfering in any material respect with the
business of the Company or any of its Subsidiaries; and
(f) Easements, rights of way, restrictions and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of the Company or any
of its Subsidiaries.
“Person” shall mean any individual, firm, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture, joint stock company,
Governmental Authority or other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.
“Preferred Stock” shall have the meaning assigned in the recital to this Agreement,
and as further described in the statement of powers, designations, preferences, rights and
qualifications, limitations and restrictions attached hereto as Exhibit D.
“Purchaser Affiliate” shall mean with respect to the Purchaser, any affiliate of such
Purchaser (as defined in Rule 405 under the Securities Act) and any Person who controls the
Purchaser or any affiliate of the Purchaser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act.
“Purchaser” shall have the meaning set forth in the recital to this Agreement.
“Registration Rights Agreement” shall mean the Registration Rights Agreement, among
the Purchaser and the Company, substantially in the form of Exhibit E hereto.
“Regulation D” shall mean Regulation D promulgated under the Securities Act, as the
same shall be in effect at the time.
“Rule 144” shall mean Rule 144 promulgated under the Securities Act, as the same shall
be in effect at the time
“SEC Reports” shall mean all forms, reports, statements and other documents
(including, without limitation, exhibits, annexes, supplements and amendments to such documents)
filed by the Company, or sent or made available by the Company to its security holders, under the
Exchange Act, the Securities Act, any national securities exchange or quotation system or
comparable Governmental Authority.
“Second Closing” and “Second Closing Date” shall have the respective meanings
assigned to such terms in Section 2.2(b).
“Securities” shall mean, collectively, the Notes, the Preferred Stock and the
Warrants.
“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations thereunder as the same shall be in effect at the
time.
“Security Agreement” shall mean the Security Agreement substantially in the form
attached hereto as Exhibit F.
“Series A Note” shall have the meaning assigned in the recital to this Agreement, the
form of which is attached hereto as Exhibit G.
“Series B Note” shall have the meaning assigned in the recital to this Agreement, the
form of which is attached hereto as Exhibit H.
“Series W Warrant” shall have the meaning assigned in the recital to this Agreement,
the form of which is attached hereto as Exhibit I.
“Series X Warrant” shall have the meaning assigned in the recital to this Agreement,
the form of which is attached hereto as Exhibit J.
“Series Y Warrant” shall have the meaning assigned in the recital to this Agreement,
the form of which is attached hereto as Exhibit K.
“Short Sales” shall mean all “short sales” as defined in Rule 200 under the Exchange
Act.
“Subsidiary” shall mean, with respect to any Person, a corporation or other entity of
which 50% or more of the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company or of a Subsidiary of the Company.
“Third Closing” and “Third Closing Date” shall have the respective meanings
assigned to such terms in Section 2.2(c).
“Trading Day” means any day during which the principal exchange on which the Common
Stock is traded shall be open for trading.
“Transaction Documents” shall mean collectively, this Agreement, the Notes, the
Preferred Stock, the Certificate of Designations, the Warrants, the Security Agreement, the Account
Control Agreement, the Intercreditor Agreement and the IP Security Agreement.
“Warrant Shares” shall mean the shares of Common Stock issuable upon exercise of the
Warrants in accordance with their respective terms.
“Warrants” shall mean the Series W Warrants, the Series X Warrants and the Series Y
Warrants.
1.2 Accounting Terms; Financial Statements. All accounting terms used herein and not
expressly defined in this Agreement shall have the respective meanings given to them in conformance
with GAAP. Financial statements and other information furnished after the date hereof pursuant to
the Agreement or the other Transaction Documents shall be prepared in accordance with GAAP as in
effect at the time of such preparation.
1.3 Knowledge of the Company. All references to the knowledge of the Company or to
facts known by the Company shall mean actual knowledge of the Chief Executive Officer or Chief
Financial Officer of the Company
ARTICLE II
PURCHASE AND SALE OF SECURITIES
2.1 Purchase and Sale of Notes, Preferred Stock and Warrants.
(a) Subject to the terms and conditions herein set forth, the Company agrees to issue and sell
to the Purchaser, and the Purchaser agrees to purchase from the Company at the First Closing the
Series A Note and the Series W Warrant for an aggregate purchase price of $7,000,000 (the
“Series A Purchase Price”). At the First Closing the Company shall deliver or
cause to be delivered to the Purchaser (i) the Series A Note, and (ii) the Series W Warrant.
At the First Closing, the Purchaser shall deliver the Series A Purchase Price by wire transfer of
immediately available funds to the Company.
(b) Subject to the terms and conditions herein set forth, the Company agrees to issue and sell
to the Purchaser, and the Purchaser agrees to purchase from the Company at the Second Closing the
Series B Note and the Series X Warrant for an aggregate purchase price of $3,000,000 (the
“Series B Purchase Price”). The Series X Warrant shall be initially exercisable for the
same number of shares of Common Stock as would be issuable if the Series B Note were to be
converted in full immediately following the Second Closing. At the Second Closing the Company
shall deliver or cause to be delivered to the Purchaser (i) Series B Note, and (ii) the Series X
Warrant. At the Second Closing, the Purchaser shall deliver the Series B Purchase Price by wire
transfer of immediately available funds to the Company. Notwithstanding anything to the contrary
contained herein, if the conditions to the Purchaser’s obligations to effect the Second Closing are
not satisfied by April 30, 2008, the Purchaser shall have no obligation hereunder to purchase the
Series B Note and the Series X Warrant. .The conversion price of the Series B Note and the exercise
price of the Series X Warrant shall be established as set forth in the forms attached hereto as
Exhibit H and Exhibit J.
(c) Subject to the terms and conditions herein set forth, the Company agrees to issue and sell
to the Purchaser, and the Purchaser, severally but not jointly, agrees to purchase from the Company
at the Third Closing the Preferred Stock and the Series Y Warrant for an aggregate purchase price
of $3,000,000 (the “Preferred Stock Purchase Price”). The Series Y Warrant shall be
exercisable for the same number of shares of Common Stock as would be issuable if the Preferred
Stock were to be converted in full immediately following the Third Closing. At the Third Closing
the Company shall deliver or cause to be delivered to the Purchaser (i) 3,000 shares of the
Preferred Stock, and (ii) the Series Y Warrant. At the Third Closing, the Purchaser shall deliver
the Preferred Stock Purchase Price by wire transfer of immediately available funds to the Company.
Notwithstanding anything to the contrary contained herein, if the conditions to the Purchaser’s
obligations to effect the Third Closing are not satisfied by December 31, 2008, the Purchaser shall
have no obligation hereunder to purchase the Preferred Stock and the Series Y Warrant.
2.2 Closings.
(a) The purchase and issuance of the Series A Note and the Series W Warrant shall take place
at a closing (the “First Closing”) simultaneously with the execution and delivery of this
Agreement or on such other date and time as the Parties may agree (the “First Closing
Date”) at the offices of Purchaser, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
provided that all of the conditions set forth in Article VI hereof and applicable to the First
Closing shall have been fulfilled or waived in accordance herewith.
(b) The purchase and issuance of the Series B Note and the Series X Warrant shall take place
at a closing (the “Second Closing”) promptly (but not more than three Business Days)
following notice by the Company to the Purchaser of commencement of patient enrollment (defined as
the first patient dosed) in the Phase 3 clinical trials of Lymphoseek (NEO3-01B and NEO3-01M) or
such other date and time as the Parties may agree (the “Second
Closing Date”) at the offices of the Purchaser, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx, provided that all of the conditions set forth in Article VI hereof and applicable
to the Second Closing shall have been fulfilled or waived in accordance herewith.
(c) The purchase and issuance of the Preferred Stock and the Series Y Warrant shall take place
at a closing (the “Third Closing”) promptly (but not more than three Business Days)
following (i) accrual of 200 evaluable patients who have completed surgery and injection of the
drug in the Phase 3 clinical trials of Lymphoseek (NEO3-01B and NEO3-01M), provided that the
Company and the Purchaser have determined in good faith from a review of the trial data from such
patients that the primary objective of efficacy of Lymphoseek in such patients, i.e., 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 eighty-five percent (85%) of such patients, has
been achieved; or (ii) such other date and time as the Parties may agree (the date of the Third
Closing being hereinafter referred to as the “Third Closing Date”), at the offices of the
Purchaser, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx provided that all of the
conditions set forth in Article VI hereof and applicable to the Third Closing shall have been
fulfilled or waived in accordance herewith.
2.3 Conversion Shares and Warrant Shares. The Company has authorized and has reserved
and covenants to continue to reserve, free of preemptive rights and other similar contractual
rights of stockholders a total of 46,500,000 shares of Common Stock to effect the conversion of the
Notes and Preferred Stock, and any interest or dividends accrued and outstanding thereon, and the
exercise of the Warrants. The Company further covenants that, from and after the First Closing
Date, the Company shall reserve (and hereby covenants to continue to reserve), free of preemptive
rights and other similar contractual rights, a number of its authorized but unissued shares of
Common Stock equal to the aggregate number of shares of Common Stock issuable upon the conversion
of the Notes and Preferred Stock, and any interest or dividends accrued and outstanding thereon,
and the exercise of the Warrants (without regards to any limitation on conversion or exercise set
forth in the Notes, the Preferred Stock or the Warrants).
2.4 Exemption From Registration. The Company and the Purchaser are executing and
delivering this Agreement in accordance with and in reliance upon the exemption from securities
registration afforded by Section 4(2) of the Securities Act, and the rules and regulations
promulgated thereunder, including Regulation D, and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect to any or all of
the investments to be made hereunder.
2.5 Financial Accounting and Tax Reporting. Each of the parties hereto agrees to take
reporting and other positions with respect to the Securities which are consistent with the purchase
price of the Securities set forth herein for all financial accounting purposes, unless otherwise
required by applicable GAAP or Commission rules (in which case the parties agree only to take
positions inconsistent with the purchase price of the Securities set forth herein provided that the
Lead Purchaser has consented thereto, which consent shall not be unreasonably withheld). Each of
the parties to this Agreement agrees to take reporting and other positions with respect to the
Securities which are consistent with the purchase price of the Securities set
forth herein for all other purposes, including without limitation, for all federal, state and
local tax purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser, as of the date hereof and each
Closing Date (except as set forth on the Schedule of Exceptions attached hereto with each numbered
Schedule corresponding to the section number herein), as follows:
3.1 Corporate Existence and Power. Except as set forth on Schedule 3.1, the Company
and each of its Subsidiaries: (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power and authority to own and operate its property, to lease the property it operates as lessee
and to conduct the business in which it is currently, or is currently proposed to be, engaged; (c)
is duly qualified as a foreign corporation, licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to so qualify would not have a
Material Adverse Effect; and (d) has the corporate power and authority to execute, deliver and
perform its obligations under each Transaction Document to which it is or will be a party.
3.2 Subsidiaries.
(a) Schedule 3.2 sets forth a complete and accurate list of all of the Subsidiaries of the
Company together with their respective jurisdictions of incorporation or organization. All of the
outstanding shares of capital stock of, or other equity interests in, the Subsidiaries are validly
issued, fully paid and nonassessable. Except as set forth on Schedule 3.2, all of the outstanding
shares of capital stock of, or other ownership interests in, each of the Subsidiaries are, and on
each Closing Date will be, owned by the Company or by a wholly owned Subsidiary free and clear of
any Liens. No Subsidiary has outstanding options, warrants, subscriptions, calls, rights,
convertible securities or other agreements or commitments obligating the Subsidiary to issue,
transfer or sell any securities of the Subsidiary.
(b) Except for the Subsidiaries of the Company, the Company does not own of record or
beneficially, directly or indirectly, (i) any shares of outstanding capital stock or securities
convertible into capital stock of any other Person, or (ii) any equity, voting or participating
interest in any Person.
3.3 Capitalization. The authorized capital stock and the issued and outstanding
shares of capital stock of the Company as of the First Closing Date is set forth on Schedule 3.3
hereto. All of the outstanding shares of the Common Stock and any other outstanding securities of
the Company have been duly and validly authorized. Except as set forth in this Agreement, the SEC
Reports or as set forth on Schedule 3.3 hereto, no shares of Common Stock or any other securities
of the Company are entitled to preemptive rights or registration rights and there are no
outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock
of the Company. Furthermore, except as set forth in this Agreement and as set forth on Schedule
3.3 hereto, there are no contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of the capital stock of the Company or
options, securities or rights convertible into shares of capital stock of the Company. Except for
customary transfer restrictions contained in agreements entered into by the Company in order to
sell restricted securities or as provided on Schedule 3.3 hereto, the Company is not a party to or
bound by any agreement or understanding granting registration or anti-dilution rights to any person
with respect to any of its equity or debt securities. Except as set forth on Schedule 3.3, the
Company is not a party to, and it has no knowledge of, any agreement or understanding restricting
the voting or transfer of any shares of the capital stock of the Company. The Company does not
have any stock-based compensation or option plan, other than those disclosed in the SEC Reports
(the “Plans”). Pursuant to the Plans, as of December 26, 2007, an aggregate of 1,317,500 shares of
Common Stock remain available for issuance thereunder.
3.4 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each other Transaction Document to which it is or
will be a party and the consummation of the transactions contemplated hereby and thereby, (a) has
been duly authorized by all necessary corporate action; (b) do not and will not contravene the
terms of the Certificate of Incorporation or By-Laws of the Company or any amendment thereof or any
federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound
or affected; (c) do not and will not (i) conflict with, contravene, result in any material
violation or breach of or material default under (with or without the giving of notice or the lapse
of time or both), (ii) create in any other Person a right or claim of termination or amendment, or
(iii) require any material modification or acceleration or cancellation of, any Contractual
Obligation of the Company or any of its Subsidiaries; and (d) do not and will not result in the
creation of any Lien (or obligation to create a Lien) against any material property or asset of the
Company or any of its Subsidiaries other than the Lien created by the Security Agreement, except,
in all cases, for such conflicts, defaults, terminations, amendments, acceleration, cancellations
and violations as would not, individually or in the aggregate, have a Material Adverse Effect.
3.5 Binding Effect. This Agreement has been, and each of the Transaction Documents to
which the Company will be a party to will be, duly executed and delivered by the Company, and this
Agreement constitutes, and such Transaction Documents will constitute, the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other equitable principles of
general application.
3.6 Governmental Authorization. Neither the Company nor any of its Subsidiaries is
required under federal, state, foreign or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or Governmental
Authority in order for it to execute, deliver or perform any of its obligations under the
Transaction Documents or issue and sell the Securities in accordance with the terms hereof
(other than any filings, consents and approvals which may be required to be made by the Company
under applicable state and federal securities laws, rules or regulations or any registration
provisions provided in the Registration Rights Agreement).
3.7 Issuance of Securities. The Notes, Preferred Stock and Warrants to be issued at
the Closings have been duly authorized by all necessary corporate action and, when paid for or
issued in accordance with the terms hereof, the Notes and Preferred Stock shall be validly issued
and outstanding, free and clear of all liens, encumbrances and rights of refusal of any kind, and
the Preferred Stock shall be fully paid and non-assessable. When the Conversion Shares and Warrant
Shares are issued and paid for in accordance with the terms of this Agreement and as set forth in
the Notes, Preferred Stock and Warrants, such shares will be duly authorized by all necessary
corporate action and validly issued and outstanding, fully paid and nonassessable, free and clear
of all liens, encumbrances and rights of refusal of any kind and the holders shall be entitled to
all rights accorded to a holder of Common Stock.
3.8 SEC Reports; Financial Statements. The Common Stock of the Company is registered
pursuant to Section 12(g) of the Exchange Act. Since December 31, 2004, except as described in
Schedule 3.8, the Company has filed in a timely manner all SEC Reports required to be filed by it
with the Commission pursuant to the reporting requirements of the Exchange Act. At the times of
their respective filings, each of the SEC Reports filed since December 31, 2006 (or, if amended or
superseded by a filing prior to the First Closing Date, then on the date of such filing), complied
in all material respects with the requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder and other federal, state and local laws, rules and
regulations applicable to such documents, and such SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the Company included in the
SEC Reports complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the Commission or other applicable rules and regulations
with respect thereto. Such financial statements have been prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or summary statements), and fairly
present in all material respects the financial position of the Company and its Subsidiaries as of
the dates thereof and the results of operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
3.9 No Material Adverse Change. Since December 31, 2006, the Company has not
experienced or suffered any Material Adverse Effect, except as disclosed in the SEC Reports or on
Schedule 3.9.
3.10 No Undisclosed Liabilities. Except as disclosed on Schedule 3.10 or in the SEC
Reports, neither the Company nor any of its Subsidiaries has incurred any liabilities, obligations,
claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued,
contingent or otherwise) other than those incurred in the ordinary course of the Company’s or its
Subsidiaries respective businesses or which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.
3.11 Indebtedness. Schedule 3.11 sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness (other than trade accounts payable and accrued liabilities
incurred in the ordinary course of business) of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. Neither the Company nor any Subsidiary is in default
with respect to any Indebtedness (other than defaults under trade accounts payable and accrued
liabilities incurred in the ordinary course of business that would not reasonably expected to cause
a Material Adverse Effect).
3.12 Title to Assets. Each of the Company and the Subsidiaries has good and valid
title to all of their respective real and personal property reflected in the SEC Reports, free and
clear of any mortgages, pledges, charges, liens, security interests or other encumbrances, except
for Permitted Encumbrances and those indicated on Schedule 3.12 hereto or such that, individually
or in the aggregate, do not cause a Material Adverse Effect. Any material leases of the Company and
each of its Subsidiaries are valid and subsisting and in full force and effect.
3.13 Actions Pending. There is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary which questions the validity of this
Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby
or thereby or any action taken or to be taken pursuant hereto or thereto. Except as set forth in
the SEC Reports or on Schedule 3.13, there is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the
Company, threatened against or involving the Company, any Subsidiary or any of their respective
properties or assets, which individually or in the aggregate, would reasonably be expected, if
adversely determined, to have a Material Adverse Effect. There are no outstanding orders,
judgments, injunctions, awards or decrees of any court, arbitrator or Governmental Authority
against the Company or any Subsidiary or any officers or directors of the Company or Subsidiary in
their capacities as such, which individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
3.14 Compliance with Law. The business of the Company and the Subsidiaries has been
and is presently being conducted in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, except such that, individually or in the
aggregate, the noncompliance therewith could not reasonably be expected to have a Material Adverse
Effect. The Company and each of its Subsidiaries have all franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted by it unless the failure to possess such franchises, permits,
licenses, consents and other governmental or regulatory authorizations and approvals, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.15 Taxes. The Company and each of its Subsidiaries has timely filed or has valid
extensions of the time to file all federal, state and other material tax returns required by law to
be filed by it, has paid or made provisions for the payment of all taxes shown to be due and all
additional assessments, and adequate provisions have been and are reflected in the financial
statements of the Company and the Subsidiaries for all current taxes and other charges to which the
Company or any Subsidiary is subject and which are not currently due and payable. Except as
disclosed on Schedule 3.15 hereto or in the SEC Reports, to the best of the Company’s knowledge,
none of the federal income tax returns of the Company or any Subsidiary have been audited by the
Internal Revenue Service. The Company has no knowledge of any additional assessments, adjustments
or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or
threatened against the Company or any Subsidiary for any period, nor of any basis for any such
assessment, adjustment or contingency.
3.16 Brokers’ or Finders’ Fees. Except as set forth on Schedule 3.16, the Company has
not employed any broker or finder or incurred any liability for any brokerage or investment banking
fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in
connection with the transactions contemplated by this Agreement.
3.17 Disclosure. Except for the transactions contemplated by this Agreement, the
Company confirms that neither it nor any other person acting on its behalf has provided the
Purchaser or its agents or counsel with any information that constitutes or might constitute
material, nonpublic information. To the Company’s knowledge, neither this Agreement or the
Schedules hereto nor any other documents, certificates or instruments furnished to the Purchaser by
or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by
this Agreement contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light of the circumstances
under which they were made herein or therein, not misleading.
3.18 Intellectual Property. Except as set forth on Schedule 3.18, the Company and each
of the Subsidiaries owns or possesses the rights to all patents, trademarks, domain names (whether
or not registered) and any patentable improvements or copyrightable derivative works thereof,
websites and intellectual property rights relating thereto, service marks, trade names, copyrights,
licenses and authorizations which are necessary for the conduct of its business as now conducted
without any conflict known by the Company with the rights of others.
3.19 Books and Records; Internal Accounting Controls. The records and documents of the
Company and its Subsidiaries accurately reflect in all material respects the information relating
to the business of the Company and the Subsidiaries, the location and collection of their assets,
and the nature of all transactions giving rise to the obligations or accounts receivable of the
Company or any Subsidiary. The Company is in compliance in all material respects with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of the applicable
Closing Date. The Company and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Chief Executive Officer and the Chief Financial Officer of the Company have signed, and the
Company has furnished to the Commission, all certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act of 2002.
3.20 Material Contracts. Except as disclosed in the SEC Reports or as set forth on
Schedule 3.20 (i) the Company and each of its Subsidiaries have performed all obligations required
to be performed by them to date under any written or oral contract, instrument, agreement,
commitment, obligation, plan or arrangement, filed or required to be filed with the Commission (the
“Material Contracts”), (ii) neither the Company nor any of its Subsidiaries has received
any notice of default under any Material Contract and, (iii) to the best of the Company’s
knowledge, neither the Company nor any of its Subsidiaries is in default under any Material
Contract now in effect, except where the effect of such default would not be reasonably likely to
have a Material Adverse Effect.
3.21 Transactions with Affiliates. Except as set forth on Schedule 3.21 hereto or in
the SEC Reports, none of the officers, directors or Affiliates of the Company has entered into any
transaction with the Company or any Subsidiary that would be required to be disclosed pursuant to
Item 404(a), (b) or (c) of Regulation S-K of the Commission.
3.22 Securities Act. The Company has complied and will comply with all applicable
federal and state securities laws in connection with the offer, issuance and sale of the Securities
hereunder. Neither the Company nor anyone acting on its behalf, directly or indirectly, has or
will take any action that would require registration under the Securities Act or applicable state
securities laws of the offer, sale or issuance of the Securities to the Purchaser. Neither the
Company nor any of its Affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of any of the Securities.
3.23 Employees. Neither the Company nor any Subsidiary has any collective bargaining
arrangements or agreements covering any of its employees. No executive officer or key employee of
the Company or any Subsidiary whose termination, either individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, has terminated or, to the knowledge of the
Company, has any present intention of terminating his or her employment or engagement with the
Company or any Subsidiary.
3.24 Absence of Certain Developments. Except as set forth in the SEC Reports or
provided on Schedule 3.24 hereto, since December 31, 2006, the business and operations of the
Company and each Subsidiary have been conducted in the ordinary course consistent with past
practice, and there has not been:
(a) any declaration, setting aside or payment of any dividend or other distribution of the
assets of the Company or any Subsidiary with respect to any shares of capital stock of the Company
or any Subsidiary or any repurchase, redemption or other acquisition by
the Company or any Subsidiary of any outstanding shares of the Company’s or any Subsidiary’s
capital stock;
(b) any damage, destruction or loss, whether or not covered by insurance, except for such
occurrences, individually and collectively, that have not had, and would not reasonably be expected
to have, a Material Adverse Effect;
(c) any waiver by the Company or any Subsidiary of a valuable right or of a material debt owed
to it;
(d) any material change or amendment to, or any waiver of any material right under any
Contractual Obligation by which the Company or any Subsidiary or any of the Company’s or any
Subsidiary’s assets or properties is bound or subject;
(e) any change by the Company in its accounting principles, methods or practices or in the
manner in which it keeps its accounting books and records, except any such change required by a
change in GAAP or by the Commission;
(f) any sale, transfer or disposition of any tangible or intangible asset, in each case in
excess of $250,000, other than in the ordinary course of business; or
(g) any changes in executive officer compensation except in the ordinary course of business
and consistent with past practices; or
(h) any capital expenditures or commitments therefor that aggregate in excess of $100,000;
3.25 Investment Company Act Status. The Company is not, and as a result of and
immediately upon the Closing will not be, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940, as amended.
3.26 DTC Status. Except as set forth on Schedule 3.26 hereto, the Company’s transfer
agent is a participant in and the Common Stock is eligible for transfer pursuant to the Depository
Trust Company Automated Securities Transfer Program. The name, address, telephone number, fax
number, contact person and email of the Company transfer agent is set forth on Schedule 3.26
hereto.
3.27 Clinical Trials. The material human clinical trials conducted by the Company or
in which the Company has participated and that are described in the SEC Reports, or the results of
which are referred to in the SEC Reports, if any, are the only material human clinical trials
currently being conducted by or on behalf of the Company, and, to the Company’s knowledge, such
studies and tests were and, if still pending, are being, conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional scientific standards; the
descriptions of the results of such studies, tests and trials contained in the SEC Reports, if any,
were accurate and complete in all material respects as of the respective date(s) of such SEC
Reports. Except as set forth in the SEC Reports, the Company has no knowledge of any other studies
or tests, the results of which call into question the results of the clinical trials
described in the SEC Reports. The Company has not received any notices or correspondence from
the United States Food and Drug Administration (the “FDA”) or any other governmental agency
requiring the termination, suspension or modification of any clinical trials conducted by, or on
behalf of, the Company or in which the Company has participated that are described in the SEC
Reports, if any, or the results of which are referred to in the SEC Reports. All human clinical
trials previously conducted by or on behalf of the Company while conducted by or on behalf of the
Company, were conducted in accordance with experimental protocols, procedures and controls pursuant
to accepted professional scientific standards; the descriptions of the results of such studies,
tests and trials contained in the SEC Reports, if any, are accurate and complete in all material
respects as of the respective date(s) of such SEC Reports.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company, as of the date hereof and as of
each Closing Date, as follows:
4.1 Organization and Standing. The Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware.
4.2 Authorization and Power. The Purchaser has the requisite power and authority to
enter into and perform the Transaction Documents and to purchase the Securities being sold to it
hereunder. The execution, delivery and performance of the Transaction Documents by the Purchaser
and the consummation by it of the transactions contemplated hereby (a) have been duly authorized by
all necessary limited liability company action, and (b) does not contravene the terms of the
organizational or governing documents of the Purchaser. No further consent or authorization of the
Purchaser, its board of directors or other governing body, or of its members, is required for the
execution, delivery or performance of the Transaction Documents by the Purchaser. When executed and
delivered by the Purchaser, the Transaction Documents shall constitute valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other equitable principles of
general application.
4.3 Acquisition for Investment. The Purchaser is purchasing the Securities solely for
its own account and not with a view to or for sale in connection with a distribution thereof. The
Purchaser does not have a present intention to sell any of the Securities, nor a present
arrangement (whether or not legally binding) or intention to effect any distribution of any of the
Securities to or through any person or entity; provided, however, that by making the
representations herein, the Purchaser does not agree to hold the Securities for any minimum or
other specific term and reserves the right to dispose of the Securities at any time in accordance
with Federal and state securities laws applicable to such disposition. The Purchaser acknowledges
and agrees that certificates representing the Securities shall bear a legend to the following
effect:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS.
4.4 Purchaser Status. At the time Purchaser was offered the Securities, it was, and
at the date hereof it is, and on each date on which it converts a Note or Preferred Stock, or
exercises a Warrant, it will be, an “accredited investor” as defined in Rule 501(a) under the
Securities Act. The Purchaser has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Securities. The Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange Act and the Purchaser
is not a broker-dealer. Each Purchaser acknowledges that an investment in the Securities is
speculative and involves a high degree of risk.
4.5 Access to Information. The Purchaser acknowledges that it has reviewed the SEC
Reports, the Schedules to this Agreement and other information furnished by the Company, and has
been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information about the Company and Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to Purchaser’s investment in the Securities.
4.6 Rule 144. The Purchaser understands that the Securities must be held indefinitely
unless such Securities are registered under the Securities Act or an exemption from registration is
available. The Purchaser acknowledges that the Purchaser is familiar with Rule 144, and that the
Purchaser has been advised that Rule 144 permits resales only under certain circumstances. The
Purchaser understands that to the extent that Rule 144 is not available, such Purchaser will be
unable to sell any Securities without either registration under the Securities Act or the existence
of another exemption from such registration requirement.
4.7 Certain Trading Activities. The Purchaser has not directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with the Purchaser, engaged in any
transactions in the securities of the Company (including, without limitations, any Short Sales
involving the Company’s securities) since the earlier to occur of (a) the time that such Purchaser
was first contacted by or on behalf of the Company regarding an investment in the Company, or (b)
the 30th day prior to the date of this Agreement. The Purchaser covenants that neither it nor any
Person acting on its behalf or pursuant to any understanding with it will engage in any Short Sales
of the Common Stock until the earlier to occur of (i) the Third Closing Date, (ii) December 31,
2008, or (iii) the earlier termination of the Purchaser’s obligation to purchase the Preferred
Stock at the Third Closing (including the termination of such obligation resulting from a failure
to effect the Second Closing hereunder or the Company’s notification to the Purchaser of its
inability to satisfy the conditions set forth in 6.2(j)) (the “No-Short Period”).
Upon termination of the No-Short Period, the Purchaser shall be permitted to engage in Short Sales
or other hedging activities with respect to the Common Stock, but shall maintain, at any time while
the Notes or Preferred Stock are held by the Purchaser, a “net-long” position with respect to the
Common Stock, i.e., Purchaser may make Short Sales of Common Stock at any time when Purchaser holds
an equivalent offsetting long position in Common Stock (including, for purposes of this definition,
a long position in Common Stock underlying the Securities on an as-converted or as-exercised
basis).
4.8 No General Solicitation. The Purchaser acknowledges that the Securities were not
offered to the Purchaser by means of any form of general or public solicitation or general
advertising, or publicly disseminated advertisements or sales literature, including (a) any
advertisement, article, notice or other communication published in any newspaper, magazine, or
similar media, or broadcast over television or radio, or (b) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.
4.9 Independent Investment Decision. The Purchaser has independently evaluated the
merits of its decision to purchase Securities pursuant to the Transaction Documents. The Purchaser
has not relied on the business or legal advice of the Company or any of its agents, counsel or
Affiliates in making its investment decision hereunder, and confirms that none of such Persons has
made any representations or warranties to such Purchaser in connection with the transactions
contemplated by the Transaction Documents other than as contained therein.
4.10 Exemption From Registration. Each Purchaser understands that the Securities are
being offered and sold in reliance on a transactional exemption from the registration requirements
of federal and state securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Securities. The Purchaser understands that no Governmental Authority has
passed upon or made any recommendation or endorsement of the Securities.
4.11 Certain Fees. The Purchaser has not employed any broker or finder or incurred any
liability for any brokerage or investment banking fees, commissions, finders’ structuring fees,
financial advisory fees or other similar fees in connection with the transactions contemplated by
this Agreement.
4.12 No Agreements. The Purchaser has not agreed to act with any other Person for the
purpose of acquiring, holding, voting or disposing of the Securities purchased hereunder for
purposes of Section 13(d) of the Exchange Act, and the Purchaser is acting independently with
respect to its investment in the Securities.
ARTICLE V
COVENANTS
Unless otherwise specified in this Section, for so long as any Notes have not been paid in
full or converted in full, or at least 750 shares of Preferred Stock remain outstanding, or, in the
case of Sections 5.8, 5.12 and 5.13, for so long as the Purchaser owns any Securities, the Company
covenants with the Purchaser as follows, which covenants are for the benefit of the Purchaser and
their respective permitted assignees.
5.1 Registration and Listing. The Company shall cause its Common Stock to continue to
be registered under Sections 12(b) or 12(g) of the Exchange Act, to comply in all respects with its
reporting and filing obligations under the Exchange Act, to comply with all requirements related to
any registration statement filed pursuant to this Agreement, and to not take any action or file any
document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting and filing
obligations under the Exchange Act or Securities Act, except as permitted herein. The Company will
take all action necessary to continue the listing or trading of its Common Stock on the OTC
Bulletin Board or other exchange or market on which the Common Stock is trading. Subject to the
terms of the Transaction Documents, the Company further covenants that it will take such further
action as the Purchaser may reasonably request, all to the extent required from time to time to
enable the Purchaser to sell the Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act. Upon
the request of the Purchaser, the Company shall deliver to the Purchaser a written certification of
a duly authorized officer as to whether it has complied with such requirements. Upon the request
of the Purchaser and if not then listed, the Company will submit a listing (or similar) application
for the Conversion Shares and the Warrant Shares on the principal exchange or trading market on
which the Common Stock is then traded.
5.2 Inspection Rights. Provided same would not be in violation of Regulation FD, the
Company shall permit, during normal business hours and upon reasonable request and reasonable
notice, the Purchaser or any employees, agents or representatives thereof, so long as such
Purchaser shall be obligated hereunder to purchase the Notes or Preferred Stock, or shall
beneficially own any Conversion Shares or Warrant Shares, for purposes reasonably related to such
Purchaser’s interests as a stockholder, to examine the publicly available, non-confidential records
and books of account of, and visit and inspect the properties, assets, operations and business of
the Company and any Subsidiary, and to discuss the publicly available, non-confidential affairs,
finances and accounts of the Company and any Subsidiary with any of its officers, consultants,
directors, and key employees.
5.3 Compliance with Laws. The Company shall comply, and cause each Subsidiary to
comply, with all applicable laws, rules, regulations and orders, noncompliance with which would be
reasonably likely to have a Material Adverse Effect.
5.4 Recordkeeping and Books of Account. The Company shall keep and cause each
Subsidiary to keep adequate records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied, reflecting all financial transactions of the Company and
its Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation,
depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
5.5 Reporting Requirements. If the Company ceases to file its periodic reports with
the Commission, or if the Commission ceases making these periodic reports available via the
Internet without charge, then the Company shall furnish the following to the Purchaser so long as
the Purchaser shall be obligated hereunder to purchase the Securities or shall beneficially own
Notes or Preferred Stock:
(a) Quarterly Reports filed with the Commission on Form 10-QSB as soon as practical after the
document is filed with the Commission, and in any event within five (5) days after the document is
filed with the Commission;
(b) Annual Reports filed with the Commission on Form 10-KSB as soon as practical after the
document is filed with the Commission, and in any event within five (5) days after the document is
filed with the Commission; and
(c) Copies of all notices, information and proxy statements in connection with any meetings,
that are, in each case, provided to holders of shares of Common Stock, contemporaneously with the
delivery of such notices or information to such holders of Common Stock.
5.6 Other Agreements. The Company shall not enter into any agreement in which the
terms of such agreement would materially restrict or impair the right or ability to perform of the
Company or any Subsidiary under any Transaction Document.
5.7 Use of Proceeds. The proceeds from the sale of the Securities hereunder shall be
used by the Company to repay the outstanding principal balance of and accrued interest on the 2004
Notes, redemption of the warrants issued in connection therewith, and for general working capital
purposes.
5.8 Reporting Status. So long as the Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with the Commission
pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
5.9 Disclosure of Transaction. The Company shall issue a press release describing the
material terms of the transactions contemplated hereby on the day of the Closing but in no event
later than two hours after completion of the First Closing; provided, however, that if such
Closing is completed after 3:00 P.M. Eastern Time on any Trading Day, the Company shall issue such
press release no later than 9:00 A.M. Eastern Time on the first Trading Day following the Closing
Date. The Company shall also file with the Commission a Current Report on Form 8-K describing the
material terms of the transactions contemplated hereby (and attaching as exhibits thereto this
Agreement, each form of Note, the Security Agreement, each series of Warrant and the Press Release)
as soon as practicable following the Closing Date but in no event more than two (2) Trading Days
following the Closing Date. Both the press release and Form 8-K referenced in this Section shall
be subject to prior review and comment by the Purchaser.
5.10 Disclosure of Material Information. The Company covenants and agrees that neither
it nor any other person acting on its behalf has provided or will provide the Purchaser or
its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto the Purchaser shall have executed a written agreement
regarding the confidentiality and use of such information. The Company understands and confirms
that the Purchaser shall be relying on the foregoing representations in effecting transactions in
securities of the Company. In the event of a breach of the foregoing covenant by the Company, or
any of its Subsidiaries, or any of its or their respective officers, directors, employees and
agents, in addition to any other remedy provided herein or in the Transaction Documents, the
Company shall publicly disclose any material, non-public information in a Form 8-K within five (5)
Business Days of the date that it discloses such information to the Purchaser. In the event that
the Company discloses any material, non-public information to the Purchaser and fails to publicly
file a Form 8-K in accordance with the above, the Purchaser shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise, of such material,
nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or
their respective officers, directors, employees or agents. The Purchaser shall have no liability to
the Company, its Subsidiaries, or any of its or their respective officers, directors, employees,
stockholders or agents, for any such disclosure.
5.11 Pledge of Securities. The Company acknowledges that the Securities may be pledged
by the Purchaser in connection with a bona fide margin agreement or other loan or financing
arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be
a transfer, sale or assignment of the Securities hereunder, and the Purchaser effecting a pledge of
the Securities shall not be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document;
provided, however, that the Purchaser and its pledgee shall be required to comply with the
provisions of Article V hereof in order to effect a sale, transfer or assignment of Securities to
such pledgee. At the Purchaser’s expense, the Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in connection with a pledge of
the Securities to such pledgee by the Purchaser.
5.12 Transfer Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent, and any subsequent transfer agent, to issue certificates, registered in the
name of the Purchaser or its nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts as specified from time to time by the Purchaser to the Company upon conversion of the Notes
or Preferred Stock, or exercise of the Warrants, in the form of Exhibit L attached hereto (the
“Irrevocable Transfer Agent Instructions”). Prior to registration of the Conversion Shares
and the Warrant Shares under the Securities Act, all such certificates shall bear the restrictive
legend specified in Section 4.3 of this Agreement, unless such Conversion Shares or Warrant Shares
may be sold pursuant to Rule 144. The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 4.3 will be given by the
Company to its transfer agent and that the Conversion Shares and Warrant Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement. Nothing in this Section 5.12 shall affect in any
way the Purchaser’s obligations and agreements under applicable law to comply with all applicable
prospectus delivery requirements, if any, upon resale of the Conversion Shares and the Warrant
Shares. If the Purchaser provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that a public sale, assignment or transfer of the Conversion Shares
or Warrant Shares may be made without registration under the Securities Act
or the Purchaser provides the Company with reasonable assurances that the Conversion Shares or
Warrant Shares can be sold pursuant to Rule 144 without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold, the Company shall
permit the transfer, and, in the case of the Conversion Shares and the Warrant Shares, promptly
instruct its transfer agent to issue one or more certificates in such name and in such
denominations as specified by such Purchaser and without any restrictive legend.
5.13 Legend Removal; Rule 144. The Company will provide, at the Company’s expense,
such legal opinions in the future as are reasonably necessary for the issuance and resale of the
Common Stock issuable upon conversion of the Notes and the Preferred Stock and exercise of the
Warrants pursuant to an effective registration statement, Rule 144 under the Securities Act or an
exemption from registration. In the event that Common Stock is sold in a manner that complies with
an exemption from registration, the Company will promptly instruct its counsel (at its expense) to
issue to the transfer agent an opinion permitting removal of the legend (indefinitely, if under
Rule 144, such shares of Common Stock may be sold without regards to volume limitations or the
availability of current public information concerning the Company, or to otherwise permit sale of
the shares if pursuant to the other provisions of Rule 144).
5.14 Variable Rate Securities. Without the prior written consent of the holders of a
majority of the outstanding principal balance of the Notes, the Company shall not issue or sell, or
agree to issue or sell Variable Equity Securities (as defined below) (the “Variable Equity
Securities Lock-Up”). For purposes hereof, the following shall be collectively referred to
herein as, the “Variable Equity Securities”: (A) any debt or equity securities which are
convertible into, exercisable or exchangeable for, or carry the right to receive additional shares
of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is
based upon and/or varies with the trading prices of or quotations for Common Stock at any time
after the initial issuance of such debt or equity security, or (2) with a fixed conversion,
exercise or exchange price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security due to a change in the market price of the
Company’s Common Stock since date of initial issuance, or (B) any amortizing convertible security
which amortizes prior to its maturity date, where the Company is required to or has the option to
(or the investor in such transaction has the option to require the Company to) make such
amortization payments in shares of Common Stock (whether or not such payments in stock are subject
to certain equity conditions), or (C) any transaction involving a written agreement between the
Company and an investor or underwriter whereby the Company has the right to “put” its securities to
the investor or underwriter over an agreed period of time and at an agreed price or price formula;
provided however, that the limitation contained in clause (C) above shall no longer apply upon and
after the date of the Third Closing. For purposes of the above, the “Market Price” shall
mean the volume weighted average price, as reported by Bloomberg Financial Markets
(“Bloomberg”), for the Common Stock for the 5 trading day period immediately preceding the
date in question.
5.15 Ethicon Agreement. The Company has granted a security interest in, among other
things, all Accounts (as defined in the Security Agreement) including all rights to payment of sums
due and owing, including royalty payments under the Distribution Agreement (the “Ethicon
Agreement”) between the Company and Ethicon Endo-Surgery, Inc. (“Ethicon”). Upon and
after an Event of Default under the Notes, the Purchaser shall have full control and
dominion over the account identified in the Account Control Agreement in accordance with the
terms of the Account Control Agreement. All payments made to the Company pursuant to the Ethicon
Agreement shall be made to the account identified in the Account Control Agreement. In no event
shall the Company amend, modify or terminate the Ethicon Agreement so as to materially and
adversely affect the ability of the Company to repay the Notes; further, the Company covenants and
agrees that, to the extent it receives any payment in connection with any amendment, modification
or termination, it shall hold such payment in trust for the benefit of the holders of the Notes.
The Company shall, by April 1, 2008, deliver to the Purchaser the Instruction Letter attached
hereto as Exhibit M (the “Instruction Letter”) executed by each of the Company and Ethicon.
ARTICLE VI
CONDITIONS TO CLOSINGS
6.1 Conditions Precedent to the Obligation of the Company to Close and to Sell the
Securities. The obligation hereunder of the Company to close and issue and sell the Securities
to the Purchaser at each Closing is subject to the satisfaction or waiver, at or before such
Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and
may be waived by the Company at any time in its sole discretion.
(a) Accuracy of the Purchaser’s Representations and Warranties. The representations
and warranties of the Purchaser shall be true and correct in all material respects as of the date
when made and as of the applicable Closing Date as though made at that time, except for
representations and warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.
(b) Performance by the Purchaser. The Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the
applicable Closing Date.
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental
Authority of competent jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) Delivery of Purchase Price. The Purchase Price for the Securities to be purchased
at the Closing shall have been delivered to the Company on the applicable Closing Date.
(e) Delivery of Transaction Documents. The Transaction Documents which by their terms
are required to be executed and delivered at or before the Closing shall have been duly executed
and delivered by the Purchaser to the Company.
6.2 Conditions Precedent to the Obligation of the Purchaser to Close and to Purchase the
Securities. The obligation hereunder of the Purchaser to purchase the Securities and
consummate the transactions contemplated by this Agreement at each Closing is subject to the
satisfaction or waiver, at or before such Closing, of each of the conditions set forth below.
These conditions are for the Purchaser’s sole benefit and may be waived by the Purchaser at any
time in its sole discretion.
(a) Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement and the other Transaction Documents
shall be true and correct in all material respects as of the Closing Date, except for
representations and warranties that speak as of a particular date, which shall be true and correct
in all material respects as of such date.
(b) Performance by the Company. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions required by this
Agreement or the other Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the applicable Closing Date, and no default or event of default shall have
occurred under any of the Transaction Documents prior to the applicable Closing Date.
(c) No Suspension, Etc. Trading in the Common Stock shall not have been suspended by
the Commission or the OTC Bulletin Board, and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported by Bloomberg, or on
the New York Stock Exchange, nor shall a banking moratorium have been declared either by the United
States or New York State authorities, nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis of such magnitude
in its effect on, or any material adverse change in any financial market which, in each case, in
the judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities.
(d) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental
Authority of competent jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(e) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator
or any Governmental Authority shall have been commenced, and no investigation by any Governmental
Authority shall have been threatened, against the Company or any Subsidiary, or any of the
officers, directors or affiliates of the Company or any Subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in connection with such
transactions.
(f) Opinion of Counsel. The Purchaser shall have received an opinion of counsel to the
Company, dated the date of the applicable Closing Date, substantially in the form of Exhibit N
hereto, with such exceptions and limitations as shall be reasonably acceptable to counsel to the
Purchaser.
(g) Delivery of Transaction Documents. The Company and the Subsidiaries, as
applicable, shall have duly executed and delivered to the Purchaser this Agreement, the
Security Agreement, the IP Security Agreement, the Account Control Agreement and the
Registration Rights Agreement. The Company shall have provided evidence of filing and acceptance
of the Certificate of Designations with the Secretary of State of the State of Delaware
(h) Additional Conditions to the First Closing. The outstanding principal balance and
accrued interest on the 2004 Notes shall have been paid in full, and provision shall have been made
to the Purchaser’s reasonable satisfaction for the release of all Liens securing the 2004 Notes
upon or promptly after the First Closing, the parties thereto shall have entered into the
Intercreditor Agreement, and (iii) UCC Financing Statement 3087010 8 (filed with the Secretary of
State of the State of Delaware), naming Xxxxx X. Xxxx and Xxxxxx Xxxxxxxx as secured parties, shall
have been terminated..
(i) Additional Conditions to the Second Closing. The First Closing shall have
occurred, the Purchaser shall have received notice by the Company of commencement of patient
enrollment in the Phase 3 clinical trials of Lymphoseek (defined as first patient dosed with
Lymphoseek), and no Event of Default shall have occurred and be continuing with respect to the
Series A Note or the other Transaction Documents. Further, as an additional condition of the
Purchaser’s obligations to purchase the Securities at the Second Closing, the Company and Ethicon
shall have executed the Instruction Letter.
(j) Additional Conditions to the Third Closing. (i) The Second Closing shall have
occurred, (ii) 200 evaluable patients shall have been accrued who have completed surgery and
injection of the drug in the Phase 3 clinical trials of Lymphoseek (NEO3-01B and NEO3-01M), (iii)
the Company and the Purchaser shall have determined in good faith from a review of the trial data
from such patients that the primary objective of efficacy of Lymphoseek in such patients, i.e., 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 eighty-five percent (85%) of such patients, has
been achieved, and (iv) no Event of Default shall have occurred and be continuing with respect to
the Notes or the other Transaction Documents.
(k) Notes and Warrants.
(i) At or prior to the First Closing, the Company shall have delivered to the Purchaser
the Series A Note and the Series W Warrant.
(ii) At or prior to the Second Closing, the Company shall have delivered to the
Purchaser the Series B Note and the Series X Warrant.
(iii) At or prior to the Third Closing, the Company shall have delivered to the
Purchaser the Preferred Stock and the Series Y Warrant.
(l) Secretary’s Certificate. The Company shall have delivered to the Purchaser a
secretary’s certificate, dated as of the applicable Closing Date, as to (i) the resolutions adopted
by the Board approving the transactions contemplated hereby, (ii) the Certificate of Incorporation,
(iii) the By-laws, each as in effect at such Closing, and (iv) the authority and incumbency of the
officers of the Company executing the Transaction Documents and any other documents required to be
executed or delivered in connection therewith.
(m) Officer’s Certificate. On each Closing Date, the Company shall have delivered to
the Purchaser a certificate signed by an executive officer on behalf of the Company, dated as of
such Closing Date, confirming the accuracy of the Company’s representations, warranties and
covenants as of such Closing Date and confirming the compliance by the Company with the conditions
precedent set forth in paragraphs (a)-(e) and (l) of this Section 6.2 as of such Closing Date
(provided that, with respect to the matters in paragraphs (d) and (e) of this Section 6.2, such
confirmation shall be based on the knowledge of the executive officer after due inquiry).
(n) Material Adverse Effect. No Material Adverse Effect shall have occurred.
(o) Transfer Agent Instructions. The Irrevocable Transfer Agent Instructions, in the
form of Exhibit M attached hereto, shall have been delivered to and executed by the Company’s
transfer agent, and delivered to the Purchaser’s counsel to be held in escrow pending the Closing.
(p) UCC Financing Statements. The Company shall have authorized the filing of all UCC
financing statements in form and substance satisfactory to the Purchaser at the appropriate offices
to create a valid and perfected security interest in the Collateral (as defined in the Security
Agreement), which filings are to be made promptly following Closing.
ARTICLE VII
INDEMNIFICATION
7.1 General Indemnity. The Company agrees to indemnify and hold harmless the Purchaser
and Purchaser Affiliates from and against any and all losses, liabilities, deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by the them as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by the Company herein; provided, however, that the
Company shall not be liable under this Section 7.1 to an indemnified party: (a) to the extent that
it is finally judicially determined that such losses, liabilities, deficiencies, costs, damages and
expenses resulted primarily from the willful misconduct or gross negligence of such indemnified
party or (b) to the extent that it is finally judicially determined that such losses, liabilities,
deficiencies, costs, damages and expenses resulted primarily from the breach by any indemnified
party of any representation, warranty, covenant or other agreement of such indemnified party
contained in this Agreement.
7.2 Indemnification Procedure. Any party entitled to indemnification under this
Article VII (an “indemnified party”) will give written notice to the indemnifying party of
any matter giving rise to a claim for indemnification; provided, that the failure of any party
entitled to indemnification hereunder to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Article VII except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In case any such action,
proceeding or claim is brought against an indemnified party in respect of which indemnification is
sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnifying party a conflict of interest between it and the indemnified
party exists with
respect to such action, proceeding or claim (in which case the indemnifying party shall be
responsible for the reasonable fees and expenses of one separate counsel for the indemnified
parties), to assume the defense thereof with counsel reasonably satisfactory to the indemnified
party. In the event that the indemnifying party advises an indemnified party that it will contest
such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any
indemnification notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its
defense at any time after it commences such defense), then the indemnified party may, at its
option, defend, settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume the defense of any
such claim, proceeding or action, the indemnified party’s costs and expenses arising out of the
defense, settlement or compromise of any such action, claim or proceeding shall be losses subject
to indemnification hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the
indemnified party which relates to such action or claim. The indemnifying party shall keep the
indemnified party fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend any such action or
claim, then the indemnified party shall be entitled to participate in such defense with counsel of
its choice at its sole cost and expense. The indemnifying party shall not be liable for any
settlement of any action, claim or proceeding effected without its prior written consent.
Notwithstanding anything in this Article VII to the contrary, the indemnifying party shall not,
without the indemnified party’s prior written consent, settle or compromise any claim or consent to
entry of any judgment in respect thereof which imposes any future obligation on the indemnified
party or which does not include, as an unconditional term thereof, the giving by the claimant or
the plaintiff to the indemnified party of a release from all liability in respect of such claim.
The indemnification obligations to defend the indemnified party required by this Article VII shall
be made by periodic payments of the amount thereof during the course of investigation or defense,
as and when bills are received or expense, loss, damage or liability is incurred, so long as the
indemnified party shall refund such moneys if it is ultimately determined by a court of competent
jurisdiction that such party was not entitled to indemnification.
7.3 Registration Rights. Notwithstanding anything to the contrary in this Article
VII, the indemnification and contribution provisions of the Registration Rights shall govern any
claim made with respect to registration statements filed pursuant thereto or sales made thereunder.
ARTICLE VIII
[RESERVED]
ARTICLE IX
MISCELLANEOUS
9.1 Fees and Expenses. Each party shall pay the fees and expenses of its advisors,
counsel, accountants and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this
Agreement; provided, however, that the Company shall pay to the Purchaser in connection with (i)
the preparation, negotiation, execution and delivery of the Transaction Documents and the
transactions contemplated thereunder, which payment shall be in the amount of $30,000 (which
payment has been made by the Company prior to the First Closing), (ii) any amendments,
modifications or waivers of this Agreement or any of the other Transaction Documents Documents, and
(iii) any filing fees associated with Financing Statements or the recording of security interests
in intellectual property at the United States Patent and Trademark Office. In addition, the
Company shall pay all reasonable fees and expenses incurred by the Purchaser in connection with the
enforcement of this Agreement or any of the other Transaction Documents, including, without
limitation, all reasonable attorneys’ fees and expenses, subject, in the case of any suit, action
or proceeding to enforce the Transaction Documents, to Section 9.2(b).
9.2 Specific Performance; Consent to Jurisdiction; Venue.
(a) The Company and the Purchaser acknowledge and agree that irreparable damage would occur in
the event that any of the provisions of this Agreement or the other Transaction Documents were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or the other Transaction Documents and to enforce
specifically the terms and provisions hereof or thereof, this being in addition to any other remedy
to which any of them may be entitled by law or equity.
(b) Each party to this Agreement hereby irrevocably agrees that the any legal action or
proceeding arising out of or relating to this Agreement or the other Transaction Documents
(including without limitation the Securities) and any agreements or transactions contemplated
hereby or thereby 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 party 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 this Agreement, such service to
become effective ten (10) days after such mailing. Nothing in this Section 9.2 shall affect or
limit any right to serve process in any other manner permitted by law. The Company and the
Purchaser hereby agree that the prevailing party in any suit, action or proceeding arising out of
or relating to the Securities, this Agreement or the other Transaction Documents, shall be entitled
to reimbursement for reasonable legal fees from the non-prevailing party. The parties hereby waive
all rights to a trial by jury.
9.3 Entire Agreement; Amendment. This Agreement and the Transaction Documents contain
the entire understanding and agreement of the parties with respect to the matters covered hereby
and, except as specifically set forth herein or in the other Transaction Documents, neither the
Company nor the Purchaser make any representation, warranty, covenant or undertaking with respect
to such matters, and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein. No provision of this Agreement may be waived or
amended other than by a written instrument signed by the Company and the holders of
at least a majority of the principal amount of the Notes and shares of Preferred Stock then
outstanding. Any amendment or waiver effected in accordance with this Section 9.3 shall be binding
upon the Purchaser (and its permitted assigns) and the Company.
9.4 Notices. Any notice, demand, request, waiver or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery
by telecopy or facsimile at the address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be:
If to the Company:
|
Neoprobe Corporation | |
| 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000 | ||
| Xxxxxx, Xxxx 00000-0000 | ||
| Facsimile No.: (000) 000-0000 | ||
| Attention: Xxxxx X. Xxxx, Chief Executive | ||
| Officer and President | ||
with copies (which copies
|
Porter, Wright, Xxxxxx & Xxxxxx, LLP | |
shall not constitute notice
|
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000 | |
to the Company) to:
|
Xxxxxxxx, Xxxx 00000 | |
| Telecopier No.: (000) 000-0000 | ||
| Attention: Xxxxxxx X. Xxxxx, Xx., Esq. | ||
If to the Purchaser:
|
Platinum-Montaur Life Sciences, LLC | |
| 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, | ||
| Xxx Xxxx, Xxx Xxxx 00000 | ||
| Attention: Xxxxxxx Xxxxxxxx, M.D. | ||
with copies (which copies
|
Xxxxx Xxxxxxxx & Melloni, PLC | |
shall not constitute notice
|
00 Xxxx Xxxxxx, XX Xxx 000 | |
to the Purchaser) to:
|
Xxxxxxxxxx, Xxxxxxx 00000-0000 | |
| Facsimile No.: (000) 000-0000 | ||
| Attention: Xxxxx X. XxXxxxxxx |
Any party hereto may from time to time change its address for notices by giving written notice of
such changed address to the other party hereto.
9.5 Waivers. No waiver by either party of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
9.6 Headings. The article, section and subsection headings in this Agreement are for
convenience only and shall not constitute a part of this Agreement for any other purpose and shall
not be deemed to limit or affect any of the provisions hereof.
9.7 Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto. Subject to applicable
securities laws and any restrictions contained herein, the Purchaser may assign any of its
respective rights under any of the Transaction Documents to any Person, and any holder of a Note,
shares of Preferred Stock, a Warrant or any Conversion Shares or Warrant Shares may assign, in
whole or in part, such Note, shares of Preferred Stock, a Warrant or any Conversion Shares or
Warrant Shares to any Person. The Company may not assign any of its rights, or delegate any of its
obligations, under this Agreement without the prior written consent of the Purchaser, and any such
purported assignment by the Company without the written consent of the Purchaser shall be void and
of no effect.
9.8 No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other person.
9.9 Governing Law. This Agreement 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, except to the extent that the General Corporation Law of the State of Delaware shall
apply.
9.10 Survival. The representations and warranties of the Company and the Purchaser
contained in Articles III and IV shall survive the execution and delivery hereof and the Closing
until the third anniversary of the Closing Date. The agreements and covenants set forth herein
shall survive the execution and delivery hereof and Closing hereunder.
9.11 Counterparts. Electronic transmissions or retransmissions of images of any
executed original document shall be deemed to be the same as the delivery of an executed original.
At the request of any party hereto, the other parties hereto shall confirm such electronic
transmissions by executing duplicate original documents and delivering the same to the requesting
party or parties. This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement, it being understood
that all parties need not sign the same counterpart.
9.12 Publicity. The Company agrees that it will not disclose, and will not include in
any public announcement, the name of the Purchaser without the consent of the Purchaser, which
consent shall not be unreasonably withheld or delayed, or unless and until such disclosure is
required by law, rule or applicable regulation, including without limitation any disclosure
pursuant to the Registration Statement, and then only to the extent of such requirement.
Notwithstanding the foregoing, the Purchaser consents to being identified in any filings the
Company makes with the Commission to the extent required by law or the rules and regulations of the
Commission.
9.13 Severability. The provisions of this Agreement are severable and, in the event
that any court of competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Agreement and this Agreement shall be
reformed and construed as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.
9.14 Further Assurances. From and after the date of this Agreement, upon the request
of the Purchaser or the Company, the Company and the Purchaser shall execute and deliver such
instruments, documents and other writings and perform such further acts as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of
this Agreement and the other Transaction Documents.
9.15 No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and the other Transaction Documents. In the event an
ambiguity or question of intent or interpretation arises under any provision of this Agreement or
any Transaction Document, this Agreement or such other Transaction Document 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 or any other Transaction Document.
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized officers as of the date first above written.
[Signature Page Follows]
| NEOPROBE CORPORATION |
||||
| By: | /s/ Xxxxx X. Xxxx | |||
| Name: | Xxxxx X. Xxxx | |||
| Title: | President & Chief Executive Officer | |||
| PURCHASER: PLATINUM-MONTAUR LIFE SCIENCES, LLC |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxx | |||
| Title: | Portfolio Manager | |||
