SECURITIES AMENDMENT AND EXCHANGE AGREEMENT
Exhibit
10.1
This Securities Amendment and Exchange
Agreement (the “Agreement”) is made
as of July 24, 2009 by and between Neoprobe Corporation (the “Company”) and
Platinum-Montaur Life Sciences, LLC (the “Purchaser”).
A. The
Company and the Purchaser are parties to a Securities Purchase Agreement dated
as of December 26, 2007 (the “Purchase Agreement”),
pursuant to which the Company has issued to Purchaser the following securities:
(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”).
B. The
Company and the Purchaser have agreed to (i) amend the terms of the Series A
Note, Series B Note, Series W Warrant, Series X Warrant, and Series Y Warrant
and to effect such amendments by issuing amended and restated instruments, and
(ii) to amend the terms of the Preferred Stock by amending and restating the
Certificate of Designations.
C. The
Company and the Purchaser have further agreed that, in accordance with the terms
set forth herein, (i) the Purchaser will exercise for cash the Amended Series Y
Warrant, and (ii) the Company will issue to the Purchaser the Company’s Series
AA Warrant to purchase shares of common stock of the Company (the “Series AA
Warrant”).
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.
Section
1. Definitions. Capitalized
terms used in this Agreement and not otherwise defined shall have the respective
meanings defined in the Purchase Agreement.
Section
2. Issuance and Exchange of
Securities.
(a) Subject
to the terms and conditions herein set forth, at the Closing (as defined below)
the Company will issue and deliver to the Purchaser (a) the Company’s Amended
and Restated 10% Series A Convertible Senior Secured Promissory Note in the
principal amount of $7,000,000, due December 26, 2011 in the form attached
hereto as Exhibit A (the
“Amended Series A
Note”), (b) the Company’s Amended and Restated 10% Series B Convertible
Senior Secured Promissory Note in the principal amount of $3,000,000, due
December 26, 2011, in the form attached hereto as Exhibit B (the “Amended Series B
Note”), (c) the Company’s Amended and Restated Series W
Warrant to purchase shares of common stock of the Company in the form attached
hereto as Exhibit C (the
“Amended Series W
Warrant”), (d) the Company’s Amended and Restated Series X Warrant to
purchase shares of common stock of the Company in the form attached hereto as
Exhibit D (the “Amended Series X
Warrant”); and (e) the Company’s Amended and Restated Series Y Warrant to
purchase shares of common stock of the Company in the form attached hereto as
Exhibit E (the “Amended Series Y
Warrant”).
(b) Subject
to the terms and conditions herein set forth, promptly following the Closing the
Purchaser will surrender to the Company for cancellation (a) the Series A Note
(in exchange for the Amended Series A Note), (b) the Series B Note (in exchange
for the Amended Series B Note), (c) the Series W Warrant (in exchange for the
Amended Series W Warrant) (d) the Series X Warrant (in exchange for the Amended
Series X Warrant); and (e) the Series Y Warrant (in exchange for the Amended
Series Y Warrant) (the foregoing hereinafter referred to collectively as the
“Original
Securities”). Purchaser represents to the Company that it has not
assigned, pledged or transferred any interest in the Original Securities, and
agrees to indemnify the Company from any expenses, losses or damages, including,
but not limited to, reasonable attorneys fees, that the Company may suffer as a
result of the presentation of any of the Original Securities or any other claim
of ownership of the right to purchase the Common Stock issuable upon the
exercise or conversion of the Original Securities by any third party. The
Purchaser makes this representation in connection with the effectiveness of
Exchanged Securities, which shall in all respects supersede and replace the
Original Securities.
Section
3. Issuance of Series AA
Warrant. Subject to the terms and conditions herein set forth,
the Company agrees to issue to the Purchaser at the Closing the Series AA
Warrant in the form attached hereto as Exhibit E.
Section
4. Exercise of Amended Series Y
Warrant. The Purchaser hereby delivers notice, pursuant to
Section 8(a) of the Amended Series Y Warrant, that it waives the provisions of
Section 8(a) therein effective as of the 61st day
following the Closing Date (as defined below). Subject to the terms and
conditions herein set forth, the Purchaser agrees to exercise the Amended Series
Y Warrant for 2,844,319 shares of the Company’s common stock, $.001 par value
(“Common Stock”), at the Closing (but in no event in excess of any amount
permitted to be exercised pursuant to Section 8(a) of the Amended Series Y
Warrant as in effect on the Closing Date) in accordance with the terms set forth
in the Amended Series Y Warrant, which terms include without limitation the
surrender of a duly executed exercise form in the form attached thereto, and
payment by wire transfer to an account designated by the Company of the
aggregate exercise price therefore in immediately available
funds. Upon such exercise, the Company will cause to be issued to
Purchaser a certificate for 2,844,319 fully paid and non-assessable shares of
Common Stock (hereinafter referred to together with the shares of Common Stock
issued upon the exercise of the balance of the Amended Series Y Warrant as
described below as the “Amended Series Y Warrant
Shares”), as provided in Section 2(d) of the Amended Series Y Warrant,
and bearing a restrictive legend as provided in Section 2(g)(ii) of the Amended
Series Y Warrant. Upon and after the 61st day
following Closing, but in no event later than September 30, 2009, the Purchaser
shall exercise the balance of the Amended Series Y Warrant by payment by wire
transfer of immediately available funds to an account designated by the Company
of the aggregate cash exercise price therfor. Upon such exercise in
full, the Purchaser shall surrender the Amended Series Y Warrant to the Company,
the Amended Series Y Warrant shall be cancelled and the Company shall have no
further obligations in respect thereof.
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Section
5. Amendment of Certificate of
Designations. Subject to the terms and conditions herein set forth, and
effective upon the Closing, the Parties agree to amend and restate the
Certificate of Designations as provided in Exhibit F attached hereto (the “Amended Certificate of
Designations”). Immediately prior to the Closing the Company
shall execute the Amended Certificate of Designations, and promptly following
the Closing the Company shall cause it to be filed with, and accepted for filing
by, the Delaware Secretary of State.
Section
6. Closing. The
issuance and exchange of the Amended Series A Note, Amended Series B Note,
Amended Series W Warrant, Amended Series X Warrant, and Amended Series Y
Warrant, the issuance of the Series AA Warrant, and the partial exercise of the
Amended Series Y Warrant shall take place at a closing (the “Closing”)
simultaneously with the execution and delivery of this Agreement or on such
other date and time as the Parties may agree (the “Closing Date”) at the
offices of Purchaser, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇. Upon Closing, the Company shall deliver to the Purchaser a legal opinion
in form and substance reasonably satisfactory to the Purchaser.
Section
7. Representations and
Warranties of the Company.
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement
as well as under the Amended Series A Note, the Amended Series B Note, the
Amended Series W Warrant, the Amended Series X Warrant, the Amended Series Y
Warrant and the Series AA Warrant (collectively, the “Exchanged
Securities”) and issue the Amended Series Y Warrant Shares.
(b) The
execution, delivery and performance by the Company of this Agreement and the
Exchanged Securities, the issuance of the Exchanged Securities and
the Amended Series Y Warrant Shares (collectively, the “New Securities”), 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.
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(c) This
Agreement has been, and each of the Exchanged Securities will be, duly executed
and delivered by the Company, and this Agreement constitutes, and such Exchanged
Securities 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.
(d) 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 this Agreement or issue and sell the New 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).
(e) The
New Securities to be issued at the Closing have been duly authorized by all
necessary corporate action and, when paid for or issued in accordance with the
terms hereof, they shall be validly issued and outstanding, free and clear of
all liens, encumbrances and rights of refusal of any kind, and the Amended
Series Y Warrant Shares, upon issuance, shall be fully paid and
non-assessable.
(f) The
Company has authorized and reserved, and covenants to continue to reserve, free
of preemptive rights and other similar contractual rights of stockholders,
shares of Common Stock sufficient to effect the conversion of the Amended Series
A Note and the exercise of the Series AA Warrant.
(g) The
Series AA Warrant shall be deemed to be a “Warrant” for all purposes under the
Transaction Documents. The collateral granted to the Purchaser under
the Transaction Documents, including without limitation, all collateral under
the Security Agreement, shall continue to secure the obligations of the Company
to the Purchaser as set forth in the Transaction Documents, including, as
applicable, the Exchanged Securities. The Purchaser’s interest in the
collateral pledged by the Company to secure its obligations to the Purchaser
retains its original priority, unimpaired by the Amendments contemplated
hereby. Without limiting the generality of the foregoing, references
in the Registration Rights Agreement to the Warrant shall be deemed to include
the Series AA Warrant, and references to Registrable Securities shall be deemed
to include the shares issuable upon exercise of the Series AA
Warrant.
(h) The
holding period, for purposes of Rule 144 under the Securities Act, for the
shares of Common Stock issuable upon exercise or conversion of (i) the Amended
Series A Note and the Series W Warrant began on December 26, 2007, (ii) the
Amended Series B Note and the Series X Warrant began on April 16, 2008 and (iii)
the Preferred Shares and the Amended Series Y Warrant began on December 5, 2008,
and the transactions contemplated hereby shall not affect the holding periods
set forth in clauses (i) through (iii) above for purposes of Rule
144.
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Section
8. Representations and
Warranties of the Purchaser.
(a) The
Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of Delaware.
(b) The
Purchaser has the requisite power and authority to enter into and perform this
Agreement and to purchase the New Securities being issued to it
hereunder. The execution, delivery and performance of this Agreement
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 this
Agreement by the Purchaser. When executed and delivered by the Purchaser, this
Agreement shall constitute the valid and binding obligation 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.
(c) The
Purchaser is acquiring the New 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 New 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 New Securities
(or securities issued upon conversion or exercise of the New Securities) for any
minimum or other specific term and reserves the right to dispose of the New
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 New 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.
(d) The
Purchaser is 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 New 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. Purchaser acknowledges that an investment in the Securities is
speculative and involves a high degree of risk.
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(e) The
Purchaser acknowledges that it has reviewed the SEC Reports, 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 this
Agreement and the New Securities and the merits and risks of investing in the
New 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 New Securities.
(f) The
Purchaser understands that the New 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, the Purchaser will be unable to
sell any New Securities without either registration under the Securities Act or
the existence of another exemption from such registration
requirement.
(g) The
Purchaser understands that the Securities are being issued 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
Purchaser set forth herein in order to determine the applicability of such
exemptions. The Purchaser understands that no Governmental Authority has passed
upon or made any recommendation or endorsement of the New
Securities.
(h) 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.
Section
9. No Other
Modification. References in the Purchase Agreement,
Registration Rights Agreement (as amended) and Security Agreement to the Series
A Note, Series B Note, Series W Warrant, Series X Warrant and Series Y Warrant
shall be deemed from and after the date of this Agreement to refer to the
Amended Series A Note, the Amended Series B Note, the Amended Series W Warrant
Amended Series X Warrant, and Amended Series Y Warrant, respectively. References
to Conversion Shares and Warrant Shares in the Transaction Documents shall be
deemed to include the Shares of Common Stock issuable upon the exercise or
conversion of the Exchanged Securities. Except as expressly modified
or amended hereby, the terms and conditions of the Purchase Agreement,
Registration Rights Agreement (as amended) and Security Agreement shall remain
unchanged and in full force and effect, and each of the parties hereby ratifies
and confirms the same.
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Section
10. Waiver of Blocking
Provisions. The Purchaser hereby delivers notice pursuant to:
(a) Section 3.4 (a) of each of the Amended Series A Note and Amended Series B
Note; and (b) Section 7(a) of the Amended Certificate of Designations, that
effective as of the 61st day
following the Closing Date Purchaser waives the limitations contained in the
foregoing provisions with regard to the issuance of any shares of Common Stock
to Purchaser in payment of either interest on the Amended Series A Note or
Amended Series B Note, or dividends on the Preferred Stock. This waiver shall
not apply to the restrictions set forth in either: (a) Section 3.4(b) of each of
the Amended Series A Note and Amended Series B Note; or (b) Section 7(b) of the
Amended Certificate of Designations.
Section
11. Legal Fees of
Purchaser. The Company agrees to reimburse the Purchaser for
reasonable legal fees and expenses incurred in connection with the transactions
contemplated by this Agreement in an amount not to exceed $5,000.
Section
12. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original and all such counterparts together shall constitute one and the same
instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized persons as of the date first indicated
above.
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NEOPROBE
CORPORATION
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By:
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:
Vice President, Finance & CFO
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PLATINUM-MONTAUR
LIFE SCIENCES, LLC
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title:
Portfolio Manager
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