<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
OR
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from ______ to______
COMMISSION FILE NUMBER: 0-20676
NEOPROBE CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 31-1080091
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
425 METRO PLACE NORTH, SUITE 400, DUBLIN, OHIO 43017
(Address of principal executive offices)
614-793-7500
(Issuer's telephone number, including area code)
Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES /X/ NO / /
20,117,937 SHARES OF COMMON STOCK, PAR VALUE $.001 PER SHARE
(Number of shares of issuer's common equity
outstanding as of the close of business on August 8, 1996)
Transitional Small Business Disclosure Format (check one): YES / / NO /X/
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEOPROBE CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1995 1996
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $10,032,973 $29,596,610
Available-for-sale securities 7,279,659 13,329,875
Stock subscriptions receivable 1,262,513 0
Accounts receivable:
Trade 176,434 128,397
Related parties 7,896 0
Inventory 473,004 331,693
Prepaid expenses and other current assets 784,016 1,435,118
----------- -----------
Total current assets 20,016,495 44,821,693
----------- -----------
Long term investment 0 1,500,078
Property and equipment, at cost, net of accumulated
depreciation and amortization 3,565,272 4,336,409
Intangible assets, net of accumulated amortization 523,249 2,555,400
Other assets 40,314 52,290
----------- -----------
Total assets $24,145,330 $53,265,870
=========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
1
<PAGE> 3
NEOPROBE CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ --------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable:
Trade $ 1,558,916 $ 1,286,390
Related parties 25,838 0
Accrued expenses 957,049 1,048,977
Notes payable to finance company 128,487 31,777
Capital lease obligation, current 244,348 174,777
------------ ------------
Total current liabilities 2,914,638 2,541,921
------------ ------------
Long term debt 1,100,000 550,000
Capital lease obligation 82,043 22,450
------------ ------------
Total liabilities 4,096,681 3,114,371
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000 shares authorized at December 31,
1995 and June 30, 1996; none outstanding (500,000 shares designated as
Series A, $.001 par value, at June 30, 1996; none
outstanding) -- --
Common stock; $.001 par value; 50,000,000 shares authorized,
17,534,800 and 20,057,125 shares issued; 17,334,800 and 19,957,125
shares outstanding at December 31, 1995 and
June 30, 1996, respectively 17,335 19,957
Additional paid in capital 62,964,787 101,127,897
Deficit accumulated during development stage (43,146,860) (51,095,677)
Unrealized gain (loss) on available-for-sale securities 46,480 (77,311)
Cumulative foreign currency translation adjustment 166,907 176,633
------------ ------------
Total stockholders' equity 20,048,649 50,151,499
------------ ------------
Total liabilities and stockholders' equity $ 24,145,330 $ 53,265,870
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
2
<PAGE> 4
NEOPROBE CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NOVEMBER 16,
1983
THREE MONTHS ENDED SIX MONTHS ENDED (INCEPTION)
JUNE 30, JUNE 30, TO JUNE 30,
1995 1996 1995 1996 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $ 277,985 $ 159,419 $ 551,008 $ 355,816 $ 3,243,627
Cost of goods sold 165,504 79,233 322,897 229,974 1,681,498
----------- ----------- ----------- ------------ ------------
Gross profit 112,481 80,186 228,111 125,842 1,562,129
----------- ----------- ----------- ------------ ------------
Operating expenses:
Research and development expenses:
Wages and benefits 699,014 979,290 1,480,778 1,839,252 11,010,210
Contracted services 227,480 674,149 589,138 1,325,896 5,863,343
Clinical trials 578,967 1,849,775 1,268,058 2,655,676 15,488,868
Other 197,056 270,420 318,785 505,556 2,780,532
----------- ----------- ----------- ------------ ------------
Total research and development 1,702,517 3,773,634 3,656,759 6,326,380 35,142,953
----------- ----------- ----------- ------------ ------------
General and administrative expenses:
Wages and benefits 235,459 393,181 487,734 716,692 5,955,887
Contracted services 70,695 153,478 135,201 298,626 2,450,610
Professional services 113,155 173,618 232,480 338,767 3,051,858
Depreciation and amortization 134,468 166,110 271,015 303,576 1,844,178
Other 416,369 602,120 758,513 1,103,818 7,463,297
----------- ----------- ----------- ------------ ------------
Total general and administrative 970,146 1,488,507 1,884,943 2,761,479 20,765,830
----------- ----------- ----------- ------------ ------------
Loss from operations (2,560,182) (5,181,955) (5,313,591) (8,962,017) (54,346,654)
----------- ----------- ----------- ------------ ------------
Other income (expense):
Interest income 99,568 568,495 148,732 803,323 2,389,363
Interest expense (26,552) (11,075) (40,425) (21,287) (443,891)
Gain (loss) on foreign currency
transactions 4,214 (8,905) 4,495 (18,402) (19,606)
Other (100) 234,822 176,439 249,566 1,245,758
Minority interest 0 0 0 0 79,353
----------- ----------- ----------- ------------ ------------
Total other income 77,130 783,337 289,241 1,013,200 3,250,977
----------- ----------- ----------- ------------ ------------
Net loss $(2,483,052) $(4,398,618) $(5,024,350) $ (7,948,817) $(51,095,677)
=========== =========== =========== ============ ============
Earnings per share data:
Net loss per share of common stock $ (0.18) $ (0.22) $ (0.39) $ (0.43)
----------- ----------- ----------- ------------
Shares used in computing net loss
per share 14,023,086 19,740,705 12,939,885 18,580,659
----------- ----------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 5
NEOPROBE CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NOVEMBER 16,
1983
SIX MONTHS ENDED (INCEPTION)
JUNE 30, TO JUNE 30,
1995 1996 1996
----------- ----------- -------------
<S> <C> <C> <C>
Net cash used in operating activities $(4,335,467) $(7,234,086) $(47,354,798)
Cash flows from investing activities:
Purchase of available-for-sale securities (7,800,000) (35,393,239) (80,005,511)
Proceeds from sale of available-for-sale securities 1,147,428 25,726,484 44,108,641
Maturities of available-for-sale securities 6,763,965 3,500,000 22,482,742
Other (364,025) (1,088,590) (4,704,082)
----------- ----------- ------------
Net cash used in investing activities (252,632) (7,255,345) (18,118,210)
----------- ----------- ------------
Cash flows from financing activities:
Issuance of common stock, net 13,632,895 34,286,997 85,988,717
Other (179,558) (226,064) 9,087,691
----------- ----------- ------------
Net cash provided by financing activities 13,453,337 34,060,933 95,076,408
----------- ----------- ------------
Effect of exchange rate changes on cash 2,074 (7,865) (6,790)
----------- ----------- ------------
Net increase in cash and cash equivalents 8,867,312 19,563,637 29,596,610
Cash and cash equivalents at beginning of period 500,775 10,032,973 0
----------- ----------- ------------
Cash and cash equivalents at end of period $ 9,368,087 $29,596,610 $ 29,596,610
=========== =========== ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 6
NEOPROBE CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The information presented for June 30, 1995 and 1996, and for the periods
then ended is unaudited, but includes all adjustments (which consist only
of normal recurring adjustments) which the Company's management believes to
be necessary for the fair presentation of results for the periods
presented. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. The results for
the interim period are not necessarily indicative of results to be expected
for the year. The financial statements should be read in conjunction with
the Company's audited financial statements for the year ended December 31,
1995, which were included as part of the Company's Annual Report on Form
10-KSB (file no. 0-20676).
The Company is a development stage enterprise engaged in the development
and commercialization of technologies for the diagnosis and treatment of
cancers. There can be no assurance that the Company will be able to
commercialize its proposed products. There can also be no assurance that
adequate financing will be available when needed or on terms attractive to
the Company.
2. INVENTORY
The components of inventory are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ --------
<S> <C> <C>
Materials and component parts $101,886 $109,727
Work-in-process 107,786 0
Finished goods 263,332 221,966
------- -------
$473,004 $331,693
======== ========
</TABLE>
3. LONG-TERM DEBT
In 1995, Neoprobe (Israel) Ltd. ("Neoprobe (Israel)"), a subsidiary of the
Company, and the Company issued convertible debentures in the amount of
$1,100,000 due February 10, 1997. The debentures are convertible into
preferred shares of Neoprobe (Israel) or into shares of the Company's
common stock at a conversion price of $5.50 per share. The interest rate on
the debentures is at three percentage points above the 12-month LIBOR rate,
or approximately 9%. In March 1996, debentures in the amount of $550,000
were converted into 100,000 shares of the Company's common stock.
Certificates for an additional 100,000 shares of the Company's common stock
are being held in escrow.
4. STOCK OPTIONS
In January 1996, the Compensation Committee granted options to certain
directors, officers, and employees of the Company under the Neoprobe
Corporation Incentive Stock Option and Restricted Stock Purchase Plan (the
"Plan") for 295,200 shares of common stock, exercisable at $15.75 per
share, 50,000 vesting upon the meeting of certain milestones. Currently,
the Company has 1,938,192 options outstanding under the Plan, and 1,021,680
options have vested as of June 30, 1996.
5
<PAGE> 7
5. EQUITY
In April 1996, the Company completed the sale of 1,750,000 shares of common
stock in a public secondary offering at an offering price to the public of
$18.50. Proceeds to the Company from this offering, net of the
underwriters' discount, was approximately $30.5 million.
During April 1996, in exchange for exclusive license to certain technology,
the Company issued 124,805 shares of common stock to The Dow Chemical
Company ("Dow", Note 6).
During June 1996, Enzon, Inc. ("Enzon") exercised warrants to purchase
50,000 shares and 100,000 shares of common stock of the Company at prices
of $6.30 per share and $12.60 per share, respectively, which had been
granted under the License Agreement and Development Agreement (Note 6).
6. AGREEMENTS
In February 1996, the Company and XTL Biopharmaceuticals Ltd. ("XTL")
executed a series of agreements, including an Investment Agreement and a
Research and Development Agreement whereby XTL will perform specific
research activities using XTL's proprietary technology for the development
of future products for the Company. The Company purchased $1.5 million of
convertible debentures of XTL, convertible into approximately a 15% equity
interest in XTL as of the date of purchase. The Company also acquired a
warrant affording Neoprobe the option to purchase an additional 10% equity
interest in XTL. Neoprobe issued 125,000 shares of common stock to XTL in
exchange for the convertible debentures, warrant, and product development
activities.
In March 1996, the Company and Enzon executed an Amendment to the License
Agreement and Development Agreement. Pursuant to the Amendment, a
Development Agreement executed between the parties on August 15, 1992 has
been terminated in all respects.
In March 1996, the Company executed a Subscription and Option Agreement
with Cira Technologies, Inc. ("Cira"), under which the Company received a
10 percent equity interest in Cira and an option to increase its interest
in Cira to 25 percent at a price to be determined based on the future value
of Cira subject to a cap and a floor. Currently, the Company's Chairman and
CEO is a director of and a principal shareholder in Cira. Additionally, a
partner of a law firm, who is a director of the Company which provides
various legal services to the Company, is a shareholder of Cira. The
Company and Cira also entered into an agreement under which the Company
will provide financial, clinical, and technical support to Cira for Cira
to conduct a clinical study using Cira's technology, and the Company will
have an option to acquire an exclusive global license for Cira's
technology. The Company's financial commitment for this clinical study
is capped at $500,000, and the Company has the right to terminate the
Agreement upon review of interim results of the clinical study.
In May 1996, the Company executed two License Agreements with Dow whereby
the Company was granted exclusive licenses to several technologies covered
by patents held by Dow for use in the Company's development and
commercialization of detective and therapeutic products. In exchange, the
Company issued Dow 124,805 shares of common stock valued at approximately
$2 million. In addition, the Company agreed to make lump sum payments to
Dow following marketing approval of certain initial products and on
achieving certain sales milestones. Dow will also be paid royalties based
on continuing net sales. The initial cost of the License Agreements was
recorded as an intangible asset as of June 30, 1996. The Company is in the
process of evaluating the various technologies covered by the License
Agreements for purposes of allocating costs to each patented technology.
The Company evaluates the recoverability of carrying values of intangible
assets on a recurring basis. Management believes that no significant
impairment of the intangible asset associated with the License Agreements
has occurred.
6
<PAGE> 8
7. CONTINGENCIES
During June 1996, the Company and other additional parties were granted
their motion to dismiss as defendants in the In re Blech Securities
litigation pending in the United States District Court for the Southern
District of New York. The Company is not involved in any other substantial
litigation.
7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations and other parts of this Report contain forward-looking statements
that involve risks and uncertainties. The Company's actual results in 1996 and
future periods may differ significantly from the prospects discussed in the
forward-looking statements.
LIQUIDITY AND CAPITAL RESOURCES
The Company has devoted substantially all of its efforts and resources to
research and clinical development of innovative systems for the intraoperative
diagnosis and treatment of cancers. The RIGS system integrates radiolabeled
targeting agents and a radiation detection instrument. The Company is developing
both the radiolabeled targeting agents and radiation-detection instrument
components of the RIGS technology. The Company has completed testing in pivotal
Phase III clinical trials in both the U.S. and Europe for the detection of
metastatic colorectal cancer. In addition, the Company has completed testing in
a separate Phase III clinical trial for primary colorectal cancer in the U.S.
However, the Company must obtain regulatory approval to market its products
before commercial revenue can be generated. During July 1996, European
regulatory agencies announced they had agreed to review a dossier (i.e.
marketing application) submitted by the Company in May 1996 for its RIGS product
for the detection of metastatic colorectal cancer. The Company plans to submit a
similar Biologic License Application ("BLA") to the U.S. Food and Drug
Administration ("FDA") during the second half of 1996. In addition, the Company
is studying the safety and efficacy of RIGS products for detecting breast,
ovarian, and neuroendocrine cancers, and the safety and efficacy of certain
cancer therapy products (RIGS/ACT) for colorectal cancers. There can be no
assurance that the Company's RIGS products will be approved for marketing by the
FDA or any foreign government agency, or that any such products will be
successfully introduced or achieve market acceptance.
For the period from inception to June 30, 1996, the Company has incurred
cumulative net losses of approximately $51.1 million. The Company does not
currently have a RIGS product approved for commercial sale, and does not
anticipate commercial sales of sufficient volume to generate positive cash flow
until 1998, at the earliest. The Company has incurred, and will continue to
incur, substantial expenditures for research and development activities related
to bringing its products to the commercial market. The Company intends to devote
significant additional funds to clinical testing, manufacturing validation, and
other activities required for regulatory review of RIGS products. The amount
required to complete such testing will depend upon the outcome of regulatory
reviews. The regulatory bodies may require more testing than is currently
planned by the Company. There can be no assurance that the Company's RIGS
products will be approved for marketing by the FDA or any foreign government
agency, or that any such products will be successfully introduced or achieve
market acceptance.
Since inception, the Company has financed its operations primarily through
private and public offerings of its equity securities, from which it has raised
gross proceeds of approximately $102.0 million. In April, 1996, the Company
completed the sale of 1,750,000 shares of Common Stock at a price of $18.50 per
share in a secondary offering. Gross proceeds from this offering were $32.4
million and proceeds net of underwriting discounts were $30.5 million. As of
June 30, 1996, the Company had cash, cash equivalents, and available-for-sale
securities of $42.9 million.
New MonoCarb AB ("MonoCarb") is a wholly-owned subsidiary of the Company,
located in Lund, Sweden, where it operates a biological manufacturing and
purification facility. The Company intends to use the production capability of
MonoCarb to produce future RIGScan products. MonoCarb purchased and installed
vial filling equipment during 1995. This equipment will be used to prepare the
CC49 monoclonal antibody, produced by Bio-Intermediair BV under a manufacturing
and supply agreement with the Company, for final radiolabeling. The Company
advanced MonoCarb funds during the first half of 1996 to cover capital
expenditures of approximately $490,000 and operating expenses of approximately
$570,000. The Company anticipates advancing an additional $425,000 during the
second half of 1996 to cover operating expenses.
In 1994, the Company formed Neoprobe (Israel) Ltd. ("Neoprobe (Israel)") to
construct and operate a radiolabeling facility for the Company's targeting
agents. The Company owns 95 percent of Neoprobe (Israel), with Rotem Industries
Ltd., the private arm of the Israeli atomic energy authority ("Rotem") owning
the balance and managing the facility. In January 1995, the Company completed
negotiations with the Ministry of Finance and the Office of
8
<PAGE> 10
the Chief Scientist in Israel to provide up to $2.5 million in the form of
Israeli-government guaranteed non-recourse loans and research grants to Neoprobe
(Israel). On August 10, 1995, the Company and Neoprobe (Israel) raised $1.1
million for Neoprobe (Israel) through the issuance of convertible debentures.
Costs associated with construction of the facility and operations at Neoprobe
(Israel) during 1996 will be financed primarily with government grants and loans
guaranteed by the Israeli government.
In 1996, regulatory activities related to the RIGScan CR49 product continued to
increase as the Company submitted an application to begin marketing a colorectal
product in Europe and prepared to submit a similar application in the United
States. Consolidated research and development expenses during the second quarter
of 1996 were approximately $3.8 million, or 72 percent of total expenses for the
quarter. Consolidated general and administrative expenses were approximately
$1.5 million, or 28 percent of total expenses for the period.
The Company anticipates that 1996 research and development expenses and general
and administrative expenses will increase significantly over 1995 expenditures.
During 1996, the Company expects to complete enrollment of patients in the Phase
III clinical study for primary colorectal cancer in Europe. The Company will
also continue to focus on validating its manufacturing processes for the
production of RIGS products and completing the compilation of the applications
for colorectal cancer for submission in the United States. Additionally, during
1996, the Company anticipates opening new clinical trials for additional cancer
types and developing an activated cell therapy application of its RIGS
technology (RIGS/ACT). A significant portion of the increased general and
administrative expenses will be associated with marketing activities in
preparation for the commercial launch of the first RIGS product. The Company's
estimate of its allocation of cash resources is based on the current state of
its business operations and current business plan and current industry and
economic conditions, and is subject to revisions due to a variety of factors
including without limitation, additional expenses related to regulatory
licensing and research and development, and to reallocation among categories and
to new categories. Neoprobe may need to supplement its funding sources from time
to time.
In November 1992 and December 1993, the Company issued a total of approximately
2.3 million Class E Redeemable Common Stock Purchase Warrants ("Class E
Warrants"). These warrants are exercisable over a three-year period beginning
November 10, 1993 and expire on November 12, 1996. The Class E Warrants entitle
the holder to purchase one share of Common Stock for $6.50 per share. As of June
30, 1996, approximately 2,298,000 of the Class E Warrants were outstanding. To
the extent that these warrants are exercised, the proceeds from the exercise of
all the Class E Warrants would be approximately $15 million. However, there can
be no assurance that these warrants will be exercised, due to a variety of
factors, including the possible volatility of the price of the Company's Common
Stock.
At December 31, 1995, the Company had net operating loss carryforwards of
approximately $39.2 million to offset future taxable income through 2010.
Additionally, the Company has tax credit carryforwards of approximately $1.6
million available to reduce future income tax liability through 2010. Under
Section 382 of the Internal Revenue Code of 1986, as amended, use of prior net
operating loss carryforwards is limited after an ownership change. As a result
of ownership changes which occurred in March 1989 and in September 1994, the
Company*s net operating tax loss carryforwards and tax credit carryforwards are
subject to the limitations described by Section 382.
RESULTS OF OPERATIONS
From inception through 1993, the Company's revenue had been primarily from the
sale of radiation detection instruments to clinical and collaborative sites and
interest earned on investments. MonoCarb generated sales of serology products of
approximately $850,000 and $803,000 during the years ended December 31, 1994 and
1995, respectively. All remaining sales during these periods were from the sale
of instruments. The Company does not anticipate having significant revenue from
the sale of its RIGS products for at least the next 21 months.
Three months ended June 30, 1995 and 1996. For the three-month period ended June
30, 1995, the Company had net sales of approximately $277,000 consisting of
sales by MonoCarb of blood serology products of $225,000 and sales of
radiation-detection instruments of $52,000. Interest income generated during
this same period from investment of net proceeds from the company's financing
activities was approximately $100,000. For the three-month period ended June 30,
1996, the Company had net sales of approximately $159,000 consisting sales of
blood serology products by MonoCarb of approximately $104,000 and sales of
radiation-detection instruments of
9
<PAGE> 11
approximately $55,000. Interest income and other income were approximately
$568,000 and $234,000, respectively, for this period. The increase in interest
income over the same quarter of the prior year is due to the increase in cash,
cash equivalents and available-for-sale securities. Other income for the quarter
included approximately $250,000 related to fees from a potential marketing
partner for continuation of their option to market the Company's products in
parts of Asia offset by approximately $20,000 in other expenses. There were no
sales of radiation-detection instruments to investigational sites nor under
clinical trial agreements for either period.
Research and development expenses increased from $1.7 million in 1995 to $3.8
million in 1996. These expenses reflect the activities associated with
conducting clinical trials, including patient enrollment, training, compliance
with all regulatory concerns of the FDA and European regulatory authorities and
manufacturing validation testing of the Company's production facilities. Also
included in these expenses are other costs such as consulting services of
experts, and product development costs. The increase in research and development
expenses from 1995 to 1996 is the combined result of an increase in clinical
trial expenses from approximately $579,000 in 1995 to $1.8 million in 1996
related to preparation of marketing applications and an increase in contracted
services from approximately $227,000 in 1995 to approximately $674,000 in 1996
related to manufacturing validation testing. The Company expects these expenses
to continue during the third quarter of 1996.
General and administrative expenses increased from $1.0 million in 1995 to $1.5
million in 1996. These expenses reflect the activities associated with business
development and corporate administration. The increase in general and
administrative expenses from 1995 to 1996 is primarily from wages and benefits,
contracted and professional services, and other expenses. Wages and benefits
increased as a result of additional staff added during the second quarter.
Contracted services increased primarily as a result of fees associated with
consulting on various agreements and ventures the Company has considered or
entered into. Other expense has increased primarily related to depreciation on
fixed asset additions, leasing costs, recruiting, travel and taxes.
Six months ended June 30, 1995 and 1996. During the six-month period ended June
30, 1995 the Company had net sales of approximately $551,000 and interest and
other income of approximately $148,000 and $176,000, respectively. Product
revenue was primarily from the sale of blood group serology products by
MonoCarb, interest income was from the investment of the net proceeds from the
Company's financing activities and other income included the recovery of a
$150,000 advance to a former underwriter and principal stockholder. During the
same period in 1996, the Company had net sales of approximately $356,000 and
interest and other income of approximately $803,000 and $250,000, respectively.
The increase in interest income over the same period of the prior year is due to
the increase in cash, cash equivalents and available-for-sale securities. Other
income included approximately $230,000 related to fees from a potential
marketing partner for continuation of their option to market the Company's
product in parts of Asia. There were no sales of radiation-detection instruments
to investigational sites nor under clinical trial agreements for either period.
Research and development expenses increased from $3.7 million in the first half
of 1995 to $6.3 million in the first half of 1996. These expenses reflect the
activities associated with conducting clinical trials, including patient
enrollment, training, compliance with all regulatory concerns of the FDA and
European regulatory authorities and manufacturing validation testing of the
Company's production facilities. Also included in these expenses are other costs
such as consulting services of experts, and product development costs. This
increase in research and development expenses was the combined result of
increases in contracted services from approximately $589,000 in 1995 to $1.3
million in 1996 related to manufacturing validation testing and increases in
clinical trial expenses from $1.3 million in 1995 to $2.7 million in 1996
related to preparing the U.S. and European marketing applications.
General and administrative expenses increased from $1.9 million in the first
half of 1995 to $2.8 million in the first half of 1996. The 1996 increase was
primarily a result of increased wages and benefits, contracted services and
other expenses. Wages and benefits increased as a result of additional staff
added during the first half of the year. Contracted services increased primarily
as a result of fees associated with consulting on various agreements and
ventures the Company has considered or entered into and costs associated with
the Company's annual report. Other expense has increased primarily related to
depreciation on fixed asset additions, leasing costs, recruiting, travel and
taxes.
10
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June 1996 a lawsuit against the Registrant was terminated by
dismissal. The Registrant was named as an additional party defendant in the In
Re Blech Securities litigation pending in the United States District Court for
the Southern District of New York before Judge Robert Sweet in March 1995. The
plaintiffs were eight named individuals who were alleged to be representatives
of a class of securities purchasers. The defendants included David Blech, who
was a principal stockholder of the Registrant until September 1994, Mark
Germain, who was a director of the Registrant until September 1994, D. Blech &
Co., a registered broker-dealer owned by Mr. Blech, trustees of certain trusts
established by Mr. Blech, Bear Stearns & Co., Baird Patrick & Co., Parag Saxena
and Chancellor Capital Corp., as well as the Registrant and 10 other
corporations of which Mr. Blech was a principal stockholder (the "Corporate
Defendants"). The complaint alleged that David Blech and D. Blech & Co.
conducted a scheme intended to artificially inflate the prices of securities
issued by corporations Mr. Blech controlled; that Mr. Blech, D. Blech & Co. and
corporations controlled by Mr. Blech gave or sold cheap stock to fund managers
in order to induce them to participate in this scheme; and that David Blech, his
trusts, D. Blech & Co., Baird Patrick, Bear Stearns, the Corporate Defendants
and unnamed other persons engaged in sham transactions, including "round trip"
sales, for the purpose of artificially inflating trading volumes and securities
of corporations controlled by Mr. Blech and maintaining their trading prices.
The complaint alleged that David Blech was the controlling person and Mark
Germain was a director of the Corporate Defendants and that the knowledge and
participation of Messrs. Blech and Germain in the alleged scheme were the
responsibility of the Corporate Defendants. The complaint also alleged that the
Corporate Defendants actively engaged in the alleged scheme and benefited from
it. The complaint further alleged that all of the defendants engaged in a
conspiracy to manipulate the market and failed to disclose truthful information
about the true value of securities issued by corporations controlled by Mr.
Blech. The complaint alleged violations of Securities and Exchange Commission
Rule 10b-5 and common law fraud by all defendants, violations of the Racketeer
Influenced Corrupt Organizations Act (RICO) by defendants other than the
Corporate Defendants and liability under Securities Exchange Act Section 20(a),
as the liability of controlling persons, by Messrs. Blech and Germain and D.
Blech & Co., Baird Patrick and Bear Stearns. The amount of damages requested was
not specified in the complaint. In June 1996, Judge Sweet dismissed the
allegations against the Registrant and the other Corporate Defendants because
the plaintiffs had failed to identify the alleged fraudulent acts of the
Registrant and the other Corporate Defendants with the specificity required by
federal law. The dismissal terminated the action against the Registrant without
any findings of liability against Registrant in July 1996. The Judge's Order can
still be appealed.
ITEM 2. CHANGES IN SECURITIES
Information in response to this item was previously reported by Registrant
in a current report on Form 8-K dated June 20, 1996.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Information in response to this item was previously reported by Registrant
in a current report on Form 8-K dated June 20, 1996.
ITEM 5. OTHER INFORMATION
None
11
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) LIST OF EXHIBITS AND FINANCIAL STATEMENTS INCORPORATED BY REFERENCE
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1. Restated Certificate of Incorporation of Neoprobe
Corporation, as corrected February 18, 1994 and as amended
June 27, 1994, July 25, 1995 and June 3, 1996 (incorporated
by reference to Exhibit 99.2 to the Registrant's Current
Report on Form 8-K dated June 20, 1996; Commission File No.
0-20676).
3.2. Amended and Restated By-Laws dated July 21, 1993 (as amended
July 18, 1995 and May 30, 1996) (incorporated by reference
to Exhibit 99.4 to the Registrant's Current Report on Form
8-K dated June 20, 1996; Commission File No. 0-20676).
(4) INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS, INCLUDING
INDENTURES
4.1. See Articles FOUR, FIVE, SIX and SEVEN of the Restated
Certificate of Incorporation of the Registrant (see Exhibit
3.1).
4.2. See Articles II and VI and Section 2 of Article III and
Section 4 of Article VII of the Amended and Restated By-Laws
of the Registrant (see Exhibit 3.2).
4.3. Specimen of Class E Redeemable Common Stock Purchase Warrant
certificate (incorporated by reference to Exhibit 4.9 to the
registration statement on Form S-1; No. 33-51446).
4.4. Warrant Agreement dated November 10, 1992 between Registrant
and Continental Stock Transfer & Trust Company (incorporated
by reference to Exhibit 4.4 to the Registrant's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1992; Commission File No. 0-20676).
4.5. Supplemental Warrant Agreement dated November 12, 1993
between the Registrant and Continental Stock Transfer &
Trust Company (incorporated by reference to Exhibit 4.5 of
registration statement on Form S-3, No. 33-72658).
4.6. Rights Agreement dated as of July 18, 1995 between the
Registrant and Continental Stock Transfer & Trust Company
(incorporated by reference to Exhibit 1 of the registration
statement on Form 8-A; Commission File No. 0-20676).
(10) MATERIAL CONTRACTS.
10.1.1. - 10.1.25. Reserved.
10.1.26. Underwriting Agreement dated April 2, 1996 with Montgomery
Securities and Raymond James & Associates, Inc.
(incorporated by reference to Exhibit 1.1 to Registrant's
Current Report on Form 8-K dated April 2, 1996; Commission
File No. 0-20676).
10.2.1. - 10.2.30. Reserved.
10.2.31. Employment Agreement dated as of January 1, 1996 with John
L. Ridihalgh.
10.2.32. Employment Agreement dated as of January 1, 1996 with David
C. Bupp.
10.2.33. 1996 Stock Incentive Plan.
10.3.1. - 10.3.41. Reserved.
12
<PAGE> 14
10.3.42. Supply Agreement dated April 1, 1996 beween Neoprobe-Peptor
JV L.L.C. and Peptor Ltd. (filed pursuant to Rule 24b-2
under which the Registrant has requested confidential
treatment of certain portions of this exhibit).
10.3.43. Supply Agreement dated April 1, 1996 between Neoprobe-Peptor
JV L.L.C. and Neoprobe (Israel) Ltd. (filed pursuant to Rule
24b-2 under which the Registrant has requested confidential
treatment of certain portions of this exhibit).
10.3.44. Technology Option Agreement dated as of March 14, 1996
between CIRA Technologies, Inc. and Registrant (filed
pursuant to Rule 24b-2 under which the Registrant has
requested confidential treatment of certain portions of this
exhibit).
10.3.45. License dated May 1, 1996 between Registrant and The Dow
Chemical Company.
10.3.46. License Agreement dated May 1, 1996 between Registrant and
The Dow Chemical Company (filed pursuant to Rule 24b-2 under
which the Registrant has requested confidential treatment of
certain portions of this exhibit).
10.4.1 - 10.4.16. Reserved.
(11) STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS.
11.1. Computation of Net Loss Per Share.
(27) FINANCIAL DATA SCHEDULE.
27.1. Financial Data Schedule (submitted electronically for SEC
information only).
(B) REPORTS ON FORM 8-K.
A current report on Form 8-K dated April 2, 1996 was filed by the
Registrant reporting under Item 7 (Financial Statements and Exhibits) for the
purpose of incorporating by reference the Underwriting Agreement and Master
Agreement among Underwriters to the Registration Statement on Form S-3, No.
333-2146 (see Exhibit 10.1.26 above).
A current report on Form 8-K dated June 20, 1996 was filed by the
Registrant reporting under Item 5 (Other Events) the results of submission of
matters to a vote of security holders and changes in securities resulting
therefrom.
13
<PAGE> 15
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEOPROBE CORPORATION
(Registrant)
By: /s/ David C. Bupp
----------------------------------------
David C. Bupp, President and Chief
Operating Officer
Dated: August 14, 1996
By: /s/ John Schroepfer
----------------------------------------
John Schroepfer, Vice President
Finance & Administration
(Principal Financial and Accounting
Officer)
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE IN MANUALLY
NUMBER DESCRIPTION SIGNED ORIGINAL
<S> <C> <C>
3.1. Restated Certificate of Incorporation of Neoprobe
Corporation, as corrected February 18, 1994 and as *
amended June 27, 1994, July 25, 1995 and June 3, 1996
3.2. Amended and Restated By-Laws dated July 21, 1993 (as *
amended July 18, 1995 and May 30, 1996)
4.1. See Articles FOUR, FIVE, SIX and SEVEN of the
Restated Certificate of Incorporation of Registrant *
4.2. See Articles II and VI and Section 2 of Article III
and Section 4 of Article VII of the Amended and
Restated By-Laws of Registrant *
4.3. Specimen of Class E Redeemable Common Stock Purchase
Warrant *
4.4. Warrant Agreement dated November 10, 1992 *
4.5. Supplemental Warrant Agreement dated November 12, 1993 *
4.6. Rights Agreement between the Registrant and
Continental Stock Transfer & Trust Company dated
July 18, 1995 *
10.1.1.-10.1.25 Reserved
10.1.26. Underwriting Agreement dated April 2, 1996 with
Montgomery Securities and Raymond James & Associates,
Inc. *
10.2.1.-10.2.30. Reserved
10.2.31. Employment Agreement dated as of January 1, 1996 with
John L. Ridihalgh 18
10.2.32. Employment Agreement dated as of January 1, 1996 with
David C. Bupp 26
10.2.33. 1996 Stock Incentive Plan 34
10.3.1.-10.3.41. Reserved
10.3.42. Supply Agreement dated April 1, 1996 beween
Neoprobe-Peptor JV L.L.C. and Peptor Ltd. (filed
pursuant to Rule 24b-2 under which the Registrant has
requested confidential treatment of certain portions
of this exhibit). 56
</TABLE>
<PAGE> 17
<TABLE>
<S> <C> <C>
10.3.43. Supply Agreement dated April 1, 1996 between
Neoprobe-Peptor JV L.L.C. and Neoprobe (Israel) Ltd.
(filed pursuant to Rule 24b-2 under which the
Registrant has requested confidential treatment of
certain portions of this exhibit). 68
10.3.44. Technology Option Agreement dated as of March 14, 1996
between CIRA Technologies, Inc. and Registrant (filed
pursuant to Rule 24b-2 under which the Registrant has
requested confidential treatment of certain portions
of this exhibit). 79
10.3.45. License dated May 1, 1996 between Registrant and The
Dow Chemical Company. 91
10.3.46. License Agreement dated May 1, 1996 between Registrant and
The Dow Chemical Company (filed pursuant to Rule 24b-2 under
which the Registrant has requested confidential treatment of
certain portions of this exhibit). 100
10.4.1.-10.4.16. Reserved
11.1. Computation of Net Loss Per Share 127
27.1. Financial Data Schedule (submitted electronically for
SEC information only).
</TABLE>
* Incorporated by reference
<PAGE> 1
Exhibit 10.2.31
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of
January 1, 1996 ("Effective Date"), by and between NEOPROBE CORPORATION, a
Delaware Corporation with a place of business at 425 Metro Place North, Suite
400, Dublin, Ohio 43017-1367 (the "Company") and JOHN L. RIDIHALGH of Columbus,
Ohio (the "Employee").
WHEREAS, the Company and the Employee entered into an Employment
Agreement dated as of July 1, 1993, which was amended by a letter agreement
dated February 16, 1995 (the "1993 Employment Agreement"); and
WHEREAS, the Company and the Employee wish to establish new terms,
covenants, and conditions for the Employee's continued employment with the
Company through this agreement ("Employment Agreement").
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
1. DUTIES. From and after the Effective Date, and based upon the terms and
conditions set forth herein, the Company agrees to employ the Employee
and the Employee agrees to be employed by the Company, as Chairman of
the Board and Chief Executive Officer of the Company and in such
equivalent or additional executive level position or positions as shall
be assigned to him by the Board of Directors. While serving in such
executive level position or positions, the Employee shall report to, be
responsible to, and shall take direction from the Board of Directors of
the Company. During the Term of this Employment Agreement (as defined
in Section 2 below), the Employee agrees to devote substantially all of
his working time to the position he holds with the Company and to
faithfully, industriously, and to the best of his ability, experience
and talent, perform the duties which are assigned to him. The Employee
shall observe and abide by the reasonable corporate policies and
decisions of the Company in all business matters.
The Employee represents and warrants to the Company that Exhibit A
attached hereto sets forth a true and complete list of (a) all offices,
directorships and other positions held by the Employee in corporations
and firms other than the Company and its subsidiaries and (b) any
investment or ownership interest in any corporation or firm other than
the Company beneficially owned by the Employee (excluding investments
in life insurance policies, bank deposits, publicly traded securities
that are less than five percent (5%) of their class and real estate).
The Employee will promptly notify the Board of Directors of the Company
of any additional positions undertaken or investments made by the
Employee during the Term of this Employment Agreement if they are of a
type which, if they had existed on the date hereof, should have been
listed on Exhibit A hereto. As long as the Employee's other positions
or investments in other firms do not create a conflict of interest,
violate the Employee's obligations under Section 7 below or cause the
Employee to neglect his duties hereunder, such activities and positions
shall not be deemed to be a breach of this Employment Agreement.
-1-
<PAGE> 2
2. TERM. Subject to Sections 4 and 5 hereof, the Term of this Employment
Agreement shall be for a period of three (3) years, commencing January
1, 1996 and terminating December 31, 1998. At least twelve (12) months
prior to the expiration of the Term hereof, the Company shall provide
Employee with written notice that it intends to extend the Term hereof,
and Employee and Company then shall negotiate any changes to this
Employment Agreement for the extension thereof.
3. COMPENSATION. During the Term of this Employment Agreement, the Company
shall pay, and the Employee agrees to accept as full consideration for
the services to be rendered by the Employee hereunder, compensation
consisting of the following:
A. SALARY. Beginning on the first day of the Term and throughout the
first year of this Employment Agreement, the Company shall pay the
Employee a salary of $250,000 per year, payable in semi-monthly or
monthly installments. Promptly after both parties have signed
counterparts of this Agreement, the Company will pay to the
Employee an amount equal to the amount by which the salary
provided in the previous sentence exceeds the base salary actually
paid to the Employee during the period from the begining of the
Term through the date of payment. During the second year of the
Employment Agreement, the Company shall pay the Employee a salary
of at least $262,500 per year, payable in semi-monthly or monthly
installments. During the third year of the Employment Agreement,
the Company shall pay the Employee a salary of at least $275,500
per year, payable in semi-monthly or monthly installments.
B. BONUS. The Compensation Committee of the Board of Directors will,
on an annual basis, review the performance of the Company and of
the Employee and will pay such bonus as it deems appropriate, in
its discretion, to the Employee based upon such review. Such
review and bonus shall be consistent with any bonus plan adopted
by the Compensation Committee which covers the executive officers
of the Company generally.
C. BENEFITS. During the Term of this Employment Agreement, the
Employee will receive such employee benefits as are generally
available to all employees of the Company.
D. STOCK OPTIONS. The Compensation Committee of the Board of
Directors may, from time to time, grant stock options, restricted
stock purchase opportunities and such other forms of stock based
incentive compensation as it deems appropriate, in its discretion,
to the Employee under the Company's Stock Option and Restricted
Stock Purchase Plan and the 1996 Stock Incentive Plan (the "Stock
Plans"). The terms of the relevant award agreements shall govern
the rights of the Employee and the Company thereunder in the event
of any conflict between such agreement and this Employment
Agreement.
E. RESTRICTED STOCK. Simultaneously with the execution of this
Employment Agreement, the Employee will enter into a Restricted
Stock Purchase Agreement under the 1996 Stock Incentive Plan in
the form attached hereto as Exhibit B. The terms of
-2-
<PAGE> 3
such agreement shall govern the rights of the Employee and the
Company thereunder in the event of any conflict between such
agreement and this Employment Agreement.
F. CONTINUATION. Employee's salary and benefits shall be paid by the
Company for the full Term if the Employee is terminated without
cause. The salary and benefits shall cease if the Employee is
terminated for cause or if the Employee resigns (see Section 4).
G. VACATION. The Employee shall be entitled to twenty (20) days of
vacation during each calendar year during the Term of this
Employment Agreement.
H. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans (paragraphs C
and F above) or otherwise but in lieu of any payment of base
salary under paragraph F above, if there is a Change in Control of
the Company (as defined below) and the employment of the Employee
is concurrently or subsequently terminated (a) by the Company
without cause, (b) by the expiration of the Term of this
Employment Agreement, or (c) by the resignation of the Employee
because he has reasonably determined in good faith that his
titles, authorities, responsibilities, salary, bonus opportunities
or benefits have been materially diminished, that a material
adverse change in his working conditions has occurred or the
Company has breached this Employment Agreement, the Employee shall
be paid a severance payment equal to twice the annual base salary
of Employee as in effect immediately before such termination less
the amount of any payments of salary due to Employee under
paragraph F above.
For the purpose of this Employment Agreement, a Change in Control
of the Company has occurred when: (a) any person (defined for the
purposes of this paragraph H to mean any person within the meaning
of Section 13(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than Neoprobe or an employee benefit plan
created by its Board of Directors for the benefit of its
employees, either directly or indirectly, acquires beneficial
ownership (determined under Rule 13d-3 of the Regulations
promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by
Neoprobe having fifteen percent (15%) or more of the voting power
of all the voting securities issued by Neoprobe in the election of
Directors at the next meeting of the holders of voting securities
to be held for such purpose; (b) a majority of the Directors
elected at any meeting of the holders of voting securities of
Neoprobe are persons who were not nominated for such election by
the Board of Directors or a duly constituted committee of the
Board of Directors having authority in such matters; (c) the
stockholders of Neoprobe approve a merger or consolidation of
Neoprobe with another person, other than a merger or consolidation
in which the holders of Neoprobe's voting securities issued and
outstanding immediately before such merger or consolidation
continue to hold voting securities in the surviving or resulting
corporation (in the same relative proportions to each other as
existed before such event) comprising eighty percent (80%) or more
of the voting power for all purposes of the surviving or resulting
corporation; or (d) the stockholders of Neoprobe approve a
transfer of substantially all of the assets of
-3-
<PAGE> 4
Neoprobe to another person other than a transfer to a transferee,
eighty percent (80%) or more of the voting power of which is owned
or controlled by Neoprobe or by the holders of Neoprobe's voting
securities issued and outstanding immediately before such transfer
in the same relative proportions to each other as existed before
such event.
4. TERMINATION. The Company may terminate the employment of the Employee
prior to the end of the Term of this Employment Agreement without cause
or "for cause."
A. Termination "for cause" shall be defined as a termination by the
Company of the employment of the Employee occasioned by a willful
breach of a material duty by the Employee in the course of his
employment or willful and continued neglect of his duty as an
employee hereunder.
B. In the event of termination by the Company "for cause", all
salary, benefits and other payments shall cease at the time of
termination, and the Company shall have no further obligations to
the Employee. In the event that a benefit plan or Stock Plan which
covers the Employee has specific provisions concerning termination
of employment, then such benefit plan or Stock Plan shall control
the disposition of the benefits or stock options.
C. The parties agree that the employment relationship described
herein shall end on the termination date set forth in Section 2,
unless the parties agree at least six (6) months prior to the
termination date, in writing, to extend this Employment Agreement
as set forth in Section 2. Nevertheless, if the Employee continues
to render services in the Company's employ after that termination
date in the absence of such written extension, it is understood
that such continued employment will be "at will," terminable at
any time by either party.
D. Should the Company relocate to another city and Employee decide
not to relocate also, cessation of employment shall be without
cause hereunder. A termination without cause is a termination of
employment before the end of the Term of this Employment Agreement
that is not for cause and not occasioned by the resignation, death
or disability of the Employee.
E. The Company may terminate the employment of the Employee prior to
the end of the Term of this Employment Agreement if the Employee
has been unable to perform his duties hereunder for a continuous
period of six (6) months due to a physical or mental condition
that, in the opinion of a licensed physician, will be of
indefinite duration or is without a reasonable probability of
recovery. The Employee agrees to submit to an examination by a
licensed physician of his choice in order to obtain such opinion
at the request of the Company, made after the Employee has been
absent from his place of employment for at least six (6) months.
Such examination shall be paid for by the Company. However, this
provision does not abrogate either the Company's or the Employee's
rights and obligations pursuant to the Family and Medical Leave
Act of 1993, and a termination of employment under this paragraph
E shall not be deemed to be a termination for cause.
-4-
<PAGE> 5
5. RESIGNATION, DEATH OR DISABILITY.
A. If, during the Term of this Employment Agreement, the Employee
resigns for any reason, all salary, benefits and other payments
(except as otherwise provided in Section 3.H. above) shall cease
at the time such resignation becomes effective. In the event that
a benefit plan or Stock Plan which covers the Employee has
specific provisions relative to resignation by an employee, then
such benefit plan or Stock Plan shall control the disposition of
the benefits or stock options.
B. If during the Term of this Employment Agreement, the Employee dies
or his employment is terminated because of his disability (see
Section 4.E. above), all salary, benefits and other payments shall
cease at the time of death or disability, provided, however, that
the Company shall provide such health, dental and similar
insurance or benefits as were provided to Employee immediately
before his termination by reason of death or disability, to
Employee or his family for six (6) months after such termination
on the same terms and conditions (including cost) as were
applicable before such termination. In addition, for the first six
(6) months of disability, the Company shall pay to the Employee
the difference, if any, between any cash benefits received by the
Employee from a Company-sponsored disability insurance policy and
the Employee's salary hereunder. In the event that such a benefit
plan or a Stock Plan which covers the Employee has specific
provisions concerning the death or disability of an employee
(e.g., life insurance or disability insurance), then such benefit
plan or Stock Plan shall control the disposition of such benefits
or stock options.
C. The language set forth in this Section 5 shall not limit the
Company's right to seek other remedies for damages incurred in the
event Employee fails to comply with the terms of this Employment
Agreement.
6. PROPRIETARY INFORMATION AGREEMENT. Employee has executed a Proprietary
Information Agreement as a condition of employment with the Company.
The Proprietary Information Agreement shall not be limited by this
Employment Agreement in any manner, and the Employee shall act in
accordance with the provisions of the Proprietary Information Agreement
at all times during the Term of this Employment Agreement.
7. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for two (2) years
thereafter, the Employee will not
A. enter into the employ of or render any services to any person,
firm, or corporation, which is engaged, in any part, in a
Competitive Business (as defined below);
B. engage in any Competitive Business for his own account;
C. become associated with or interested in through retention or by
employment any Competitive Business as an individual, partner,
shareholder, creditor, director, offi-
-5-
<PAGE> 6
cer, principal, agent, employee, trustee, consultant, advisor, or
in any other relationship or capacity; or
D. solicit, interfere with, or endeavor to entice away from the
Company, any of its customers, strategic partners, or sources of
supply.
Nothing in this Employment Agreement shall preclude Employee from
investing his personal assets in the securities of any Competitive
Business if such securities are traded on a national stock exchange or
in the over-the-counter market and if such investment does not result
in his beneficially owning, at any time, more than one percent (1%) of
the publicly-traded equity securities of such Competitive Business.
"Competitive Business" for purposes of this Employment Agreement shall
mean any business or enterprise which:
a. is engaged in the development and/or commercialization of products
and/or systems for use in (1) the intraoperative detection of
cancer and/or (2) Activated Cellular Therapy for cancer, or
b. reasonably understood to be competitive in the relevant market
with products and/or systems described in clause a above, or
c. the Company engages in during the Term of this Employment
Agreement pursuant to a determination of the Board of Directors
and from which the Company derives a material amount of revenue or
in which the Company has made a material capital investment.
The Company hereby waives any claim that the stock ownership interest
of Employee in Cira Technologies, Inc., a Delaware corporation, and his
participation in the management thereof are violations of the
provisions of this Section 7. The Employee acknowledges that but for
the waiver set forth in the preceding sentence such ownership interest
and participation in the management of Cira would constitute ownership
of an equity interest and participation in the management of a
Competitive Business.
The covenant set forth in this Section 7 shall terminate immediately
upon the termination of the employment of the Employee by the Company
without cause or at the end of the Term of this Employment Agreement.
8. ARBITRATION. Any dispute or controversy arising under or in connection
with this Employment Agreement shall be settled exclusively by
arbitration in Columbus, Ohio, in accordance with the nonunion
employment arbitration rules of the American Arbitration Association
("AAA") then in effect. If specific nonunion employment dispute rules
are not in effect, then AAA commercial arbitration rules shall govern
the dispute. If the amount claimed exceeds $100,000, the arbitration
shall be before a panel of three arbitrators. Judgment may be entered
on the arbitrator's award in any court having jurisdiction. The Company
shall indemnify the Employee against, and hold him harmless from, any
attorney's fees, court costs and other expenses incurred by the
Employee in connection with the preparation, commencement, prosecution,
defense or enforcement of any arbitration, award, confirmation or
judgment in order to assert or defend any right
-6-
<PAGE> 7
or obtain any payment under paragraph H of Section 3 above or under
this sentence; without regard to the success of the Employee or his
attorney in any such arbitration or proceeding.
9. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
10. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Employment Agreement shall not affect the validity
or enforceability of any other provision of the Employment Agreement,
which shall remain in full force and effect.
11. ENTIRE AGREEMENT.
A. The 1993 Employment Agreement is terminated as of the effective
date of this Employment Agreement, except that the Stock Options
granted to the Employee in the 1993 Employment Agreement or in any
previous employment agreement or by the Compensation Committee
remain in full force and effect, and survive the termination of
the 1993 Employment Agreement and except that the bonus
opportunities granted to the Employee in paragraph 3 of the letter
agreement dated February 16, 1995 remain in full force and effect,
and survive the termination of the 1993 Employment Agreement.
B. This Employment Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions, and preliminary
agreements. This Employment Agreement may not be amended except in
writing executed by the parties hereto.
12. EFFECT ON SUCCESSORS OF INTEREST. This Employment Agreement shall inure
to the benefit of and be binding upon heirs, administrators, executors,
successors and assigns of each of the parties hereto. Notwithstanding
the above, the Employee recognizes and agrees that his obligation under
this Employment Agreement may not be assigned without the consent of
the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: /s/ David C. Bupp /s/ John L. Ridihalgh
------------------------------ -------------------------
David C. Bupp, President John L. Ridihalgh
-7-
<PAGE> 1
EXHIBIT 10.2.32
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of
January 1, 1996 ("Effective Date"), by and between NEOPROBE CORPORATION, a
Delaware Corporation with a place of business at 425 Metro Place North, Suite
400, Dublin, Ohio 43017-1367 (the "Company") and DAVID C. BUPP of Dublin, Ohio
(the "Employee").
WHEREAS, the Company and the Employee entered into an Employment
Agreement dated as of July 1, 1993, which was amended by a letter agreement
dated February 16, 1995 (the "1993 Employment Agreement"); and
WHEREAS, the Company and the Employee wish to establish new terms,
covenants, and conditions for the Employee's continued employment with the
Company through this agreement ("Employment Agreement").
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
1. DUTIES. From and after the Effective Date, and based upon the terms and
conditions set forth herein, the Company agrees to employ the Employee
and the Employee agrees to be employed by the Company, as President and
Chief Operating Officer of the Company and in such equivalent,
additional or higher executive level position or positions as shall be
assigned to him by the Board of Directors. While serving in such
executive level position or positions, the Employee shall report to, be
responsible to, and shall take direction from the Board of Directors of
the Company or the Chief Executive Officer of the Company. During the
Term of this Employment Agreement (as defined in Section 2 below), the
Employee agrees to devote substantially all of his working time to the
position he holds with the Company and to faithfully, industriously,
and to the best of his ability, experience and talent, perform the
duties which are assigned to him. The Employee shall observe and abide
by the reasonable corporate policies and decisions of the Company in
all business matters.
The Employee represents and warrants to the Company that Exhibit A
attached hereto sets forth a true and complete list of (a) all offices,
directorships and other positions held by the Employee in corporations
and firms other than the Company and its subsidiaries and (b) any
investment or ownership interest in any corporation or firm other than
the Company beneficially owned by the Employee (excluding investments
in life insurance policies, bank deposits, publicly traded securities
that are less than five percent (5%) of their class and real estate).
The Employee will promptly notify the Board of Directors of the Company
of any additional positions undertaken or investments made by the
Employee during the Term of this Employment Agreement if they are of a
type which, if they had existed on the date hereof, should have been
listed on Exhibit A hereto. As long as the Employee's other positions
or investments in other firms do not create a conflict of interest,
violate the Employee's obligations under Section 7 below or cause
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<PAGE> 2
the Employee to neglect his duties hereunder, such activities and
positions shall not be deemed to be a breach of this Employment
Agreement.
2. TERM. Subject to Sections 4 and 5 hereof, the Term of this Employment
Agreement shall be for a period of three (3) years, commencing January
1, 1996 and terminating December 31, 1998. At least twelve (12) months
prior to the expiration of the Term hereof, the Company shall provide
Employee with written notice that it intends to extend the Term hereof,
and Employee and Company then shall negotiate any changes to this
Employment Agreement for the extension thereof.
3. COMPENSATION. During the Term of this Employment Agreement, the Company
shall pay, and the Employee agrees to accept as full consideration for
the services to be rendered by the Employee hereunder, compensation
consisting of the following:
A. SALARY. Beginning on the first day of the Term and throughout the
first year of this Employment Agreement, the Company shall pay the
Employee a salary of $225,000 per year, payable in semi-monthly or
monthly installments. Promptly after both parties have signed
counterparts of this Agreement, the Company will pay to the
Employee an amount equal to the amount by which the salary
provided in the previous sentence exceeds the base salary actually
paid to the Employee during the period from the begining of the
Term through the date of payment. During the second year of the
Employment Agreement, the Company shall pay the Employee a salary
of at least $236,300 per year, payable in semi-monthly or monthly
installments. During the third year of the Employment Agreement,
the Company shall pay the Employee a salary of at least $248,000
per year, payable in semi-monthly or monthly installments.
B. BONUS. The Compensation Committee of the Board of Directors will,
on an annual basis, review the performance of the Company and of
the Employee and will pay such bonus as it deems appropriate, in
its discretion, to the Employee based upon such review. Such
review and bonus shall be consistent with any bonus plan adopted
by the Compensation Committee which covers the executive officers
of the Company generally.
C. BENEFITS. During the Term of this Employment Agreement, the
Employee will receive such employee benefits as are generally
available to all employees of the Company.
D. STOCK OPTIONS. The Compensation Committee of the Board of
Directors may, from time to time, grant stock options, restricted
stock purchase opportunities and such other forms of stock based
incentive compensation as it deems appropriate, in its discretion,
to the Employee under the Company's Stock Option and Restricted
Stock Purchase Plan and the 1996 Stock Incentive Plan (the "Stock
Plans"). The terms of the relevant award agreements shall govern
the rights of the Employee and the Company thereunder in the event
of any conflict between such agreement and this Employment
Agreement.
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<PAGE> 3
E. RESTRICTED STOCK. Simultaneously with the execution of this
Employment Agreement, the Employee will enter into a Restricted
Stock Purchase Agreement under the 1996 Stock Incentive Plan in
the form attached hereto as Exhibit B. The terms of such agreement
shall govern the rights of the Employee and the Company thereunder
in the event of any conflict between such agreement and this
Employment Agreement.
F. CONTINUATION. Employee's salary and benefits shall be paid by the
Company for the full Term if the Employee is terminated without
cause. The salary and benefits shall cease if the Employee is
terminated for cause or if the Employee resigns (see Section 4).
G. VACATION. The Employee shall be entitled to twenty (20) days of
vacation during each calendar year during the Term of this
Employment Agreement.
H. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans (paragraphs C
and F above) or otherwise but in lieu of any payment of base
salary under paragraph F above, if there is a Change in Control of
the Company (as defined below) and the employment of the Employee
is concurrently or subsequently terminated (a) by the Company
without cause, (b) by the expiration of the Term of this
Employment Agreement, or (c) by the resignation of the Employee
because he has reasonably determined in good faith that his
titles, authorities, responsibilities, salary, bonus opportunities
or benefits have been materially diminished, that a material
adverse change in his working conditions has occurred or the
Company has breached this Employment Agreement, the Employee shall
be paid a severance payment equal to twice the annual base salary
of Employee as in effect immediately before such termination less
the amount of any payments of salary due to Employee under
paragraph F above.
For the purpose of this Employment Agreement, a Change in Control
of the Company has occurred when: (a) any person (defined for the
purposes of this paragraph H to mean any person within the meaning
of Section 13(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than Neoprobe or an employee benefit plan
created by its Board of Directors for the benefit of its
employees, either directly or indirectly, acquires beneficial
ownership (determined under Rule 13d-3 of the Regulations
promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by
Neoprobe having fifteen percent (15%) or more of the voting power
of all the voting securities issued by Neoprobe in the election of
Directors at the next meeting of the holders of voting securities
to be held for such purpose; (b) a majority of the Directors
elected at any meeting of the holders of voting securities of
Neoprobe are persons who were not nominated for such election by
the Board of Directors or a duly constituted committee of the
Board of Directors having authority in such matters; (c) the
stockholders of Neoprobe approve a merger or consolidation of
Neoprobe with another person, other than a merger or consolidation
in which the holders of Neoprobe's voting securities issued and
outstanding immediately before such merger or consolidation
continue to hold voting securities in the surviving or resulting
corporation (in the same relative propor-
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<PAGE> 4
tions to each other as existed before such event) comprising
eighty percent (80%) or more of the voting power for all purposes
of the surviving or resulting corporation; or (d) the stockholders
of Neoprobe approve a transfer of substantially all of the assets
of Neoprobe to another person other than a transfer to a
transferee, eighty percent (80%) or more of the voting power of
which is owned or controlled by Neoprobe or by the holders of
Neoprobe's voting securities issued and outstanding immediately
before such transfer in the same relative proportions to each
other as existed before such event.
4. TERMINATION. The Company may terminate the employment of the Employee
prior to the end of the Term of this Employment Agreement without cause
or "for cause."
A. Termination "for cause" shall be defined as a termination by the
Company of the employment of the Employee occasioned by a willful
breach of a material duty by the Employee in the course of his
employment or willful and continued neglect of his duty as an
employee hereunder.
B. In the event of termination by the Company "for cause", all
salary, benefits and other payments shall cease at the time of
termination, and the Company shall have no further obligations to
the Employee. In the event that a benefit plan or Stock Plan which
covers the Employee has specific provisions concerning termination
of employment, then such benefit plan or Stock Plan shall control
the disposition of the benefits or stock options.
C. The parties agree that the employment relationship described
herein shall end on the termination date set forth in Section 2,
unless the parties agree at least six (6) months prior to the
termination date, in writing, to extend this Employment Agreement
as set forth in Section 2. Nevertheless, if the Employee continues
to render services in the Company's employ after that termination
date in the absence of such written extension, it is understood
that such continued employment will be "at will," terminable at
any time by either party.
D. Should the Company relocate to another city and Employee decide
not to relocate also, cessation of employment shall be without
cause hereunder. A termination without cause is a termination of
employment before the end of the Term of this Employment Agreement
that is not for cause and not occasioned by the resignation, death
or disability of the Employee.
E. The Company may terminate the employment of the Employee prior to
the end of the Term of this Employment Agreement if the Employee
has been unable to perform his duties hereunder for a continuous
period of six (6) months due to a physical or mental condition
that, in the opinion of a licensed physician, will be of
indefinite duration or is without a reasonable probability of
recovery. The Employee agrees to submit to an examination by a
licensed physician of his choice in order to obtain such opinion
at the request of the Company, made after the Employee has been
absent from his place of employment for at least six (6) months.
Such examination shall be paid for by the Company. However, this
provision does not abrogate
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<PAGE> 5
either the Company's or the Employee's rights and obligations
pursuant to the Family and Medical Leave Act of 1993, and a
termination of employment under this paragraph E shall not be
deemed to be a termination for cause.
5. RESIGNATION, DEATH OR DISABILITY.
A. If, during the Term of this Employment Agreement, the Employee
resigns for any reason, all salary, benefits and other payments
(except as otherwise provided in Section 3.H. above) shall cease
at the time such resignation becomes effective. In the event that
a benefit plan or Stock Plan which covers the Employee has
specific provisions relative to resignation by an employee, then
such benefit plan or Stock Plan shall control the disposition of
the benefits or stock options.
B. If during the Term of this Employment Agreement, the Employee dies
or his employment is terminated because of his disability (see
Section 4.E. above), all salary, benefits and other payments shall
cease at the time of death or disability, provided, however, that
the Company shall provide such health, dental and similar
insurance or benefits as were provided to Employee immediately
before his termination by reason of death or disability, to
Employee or his family for six (6) months after such termination
on the same terms and conditions (including cost) as were
applicable before such termination. In addition, for the first six
(6) months of disability, the Company shall pay to the Employee
the difference, if any, between any cash benefits received by the
Employee from a Company-sponsored disability insurance policy and
the Employee's salary hereunder. In the event that such a benefit
plan or a Stock Plan which covers the Employee has specific
provisions concerning the death or disability of an employee
(e.g., life insurance or disability insurance), then such benefit
plan or Stock Plan shall control the disposition of such benefits
or stock options.
C. The language set forth in this Section 5 shall not limit the
Company's right to seek other remedies for damages incurred in the
event Employee fails to comply with the terms of this Employment
Agreement.
6. PROPRIETARY INFORMATION AGREEMENT. Employee has executed a Proprietary
Information Agreement as a condition of employment with the Company.
The Proprietary Information Agreement shall not be limited by this
Employment Agreement in any manner, and the Employee shall act in
accordance with the provisions of the Proprietary Information Agreement
at all times during the Term of this Employment Agreement.
7. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for two (2) years
thereafter, the Employee will not
A. enter into the employ of or render any services to any person,
firm, or corporation, which is engaged, in any part, in a
Competitive Business (as defined below);
B. engage in any Competitive Business for his own account;
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<PAGE> 6
C. become associated with or interested in through retention or by
employment any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor, or in any other
relationship or capacity; or
D. solicit, interfere with, or endeavor to entice away from the
Company, any of its customers, strategic partners, or sources of
supply.
Nothing in this Employment Agreement shall preclude Employee from
taking employment in the banking or related financial services
industries nor from investing his personal assets in the securities of
any Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment
does not result in his beneficially owning, at any time, more than one
percent (1%) of the publicly-traded equity securities of such
Competitive Business. "Competitive Business" for purposes of this
Employment Agreement shall mean any business or enterprise which:
a. is engaged in the development and/or commercialization of products
and/or systems for use in (1) the intraoperative detection of
cancer and/or (2) Activated Cellular Therapy for cancer, or
b. reasonably understood to be competitive in the relevant market
with products and/or systems described in clause a above, or
c. the Company engages in during the Term of this Employment
Agreement pursuant to a determination of the Board of Directors
and from which the Company derives a material amount of revenue or
in which the Company has made a material capital investment.
The covenant set forth in this Section 7 shall terminate immediately
upon the termination of the employment of the Employee by the Company
without cause or at the end of the Term of this Employment Agreement.
8. ARBITRATION. Any dispute or controversy arising under or in connection
with this Employment Agreement shall be settled exclusively by
arbitration in Columbus, Ohio, in accordance with the nonunion
employment arbitration rules of the American Arbitration Association
("AAA") then in effect. If specific nonunion employment dispute rules
are not in effect, then AAA commercial arbitration rules shall govern
the dispute. If the amount claimed exceeds $100,000, the arbitration
shall be before a panel of three arbitrators. Judgment may be entered
on the arbitrator's award in any court having jurisdiction. The Company
shall indemnify the Employee against, and hold him harmless from, any
attorney's fees, court costs and other expenses incurred by the
Employee in connection with the preparation, commencement, prosecution,
defense or enforcement of any arbitration, award, confirmation or
judgment in order to assert or defend any right or obtain any payment
under paragraph H of Section 3 above or under this sentence; without
regard to the success of the Employee or his attorney in any such
arbitration or proceeding.
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<PAGE> 7
9. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
10. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Employment Agreement shall not affect the validity
or enforceability of any other provision of the Employment Agreement,
which shall remain in full force and effect.
11. ENTIRE AGREEMENT.
A. The 1993 Employment Agreement is terminated as of the effective
date of this Employment Agreement, except that the Stock Options
granted to the Employee in the 1993 Employment Agreement or in any
previous employment agreement or by the Compensation Committee
remain in full force and effect, and survive the termination of
the 1993 Employment Agreement and except that the bonus
opportunities granted to the Employee in paragraph 3 of the letter
agreement dated February 16, 1995 remain in full force and effect,
and survive the termination of the 1993 Employment Agreement.
B. This Employment Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions, and preliminary
agreements. This Employment Agreement may not be amended except in
writing executed by the parties hereto.
12. EFFECT ON SUCCESSORS OF INTEREST. This Employment Agreement shall inure
to the benefit of and be binding upon heirs, administrators, executors,
successors and assigns of each of the parties hereto. Notwithstanding
the above, the Employee recognizes and agrees that his obligation under
this Employment Agreement may not be assigned without the consent of
the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: s/ John L. Ridihalgh s/ David C. Bupp
-------------------- ----------------
John L. Ridihalgh, Chairman of the Board David C. Bupp
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<PAGE> 1
EXHIBIT 10.2.33
NEOPROBE CORPORATION
1996 STOCK INCENTIVE PLAN
JANUARY 18, 1996
P R E A M B L E :
1. Neoprobe Corporation, a Delaware corporation ("Neoprobe" or the
"Company") by means of this 1996 Stock Incentive Plan (the "Plan"), desires to
attract and retain capable directors, employees and consultants and to provide
them with long term incentives to continue their services to the Company, to
maximize the value of the Company to its stockholders and to acquire a
continuing ownership interest in the Company.
2. The Company has determined that the foregoing objectives will be
promoted by granting Awards (as hereinafter defined) under this Plan to certain
directors and employees of and consultants to the Company and its subsidiaries,
if any, pursuant to this Plan.
T E R M S :
Article 1. Definitions.
Section 1.1. General. Certain words and phrases used in this Plan shall
have the meanings given to them below in this section:
"Award" means a grant of Options or the right to purchase Restricted
Stock under the Plan.
"Board of Directors" means the board of directors of Neoprobe.
"Change in Control" means (a) the acquisition by any person (defined
for the purposes of this definition to mean any person within the meaning of
Section 13(d) of the Exchange Act), other than Neoprobe or an employee benefit
plan created by the Board of Directors for the benefit of its Employees, either
directly or indirectly, of the beneficial ownership (determined under Rule 13d-3
of the Regulations promulgated by the SEC under Section 13(d) of the Exchange
Act) of securities issued by Neoprobe having fifteen percent (15%) or more of
the voting power of all the voting securities issued by Neoprobe in the election
of Directors at the next meeting of the holders of voting securities to be held
for such purpose; (b) the election of a majority of the Directors elected at any
meeting of the holders of voting securities of Neoprobe who are persons who were
not nominated for such election by the Board of Directors or a duly constituted
committee of the Board of Directors having authority in such matters; (c) the
approval by the stockholders of Neoprobe of a merger or consolidation with
another person, other than a merger or consolidation in which the holders of
Neoprobe's voting securities issued and outstanding immediately before such
merger or consolidation continue to hold voting securities in the surviving or
<PAGE> 2
resulting corporation (in the same relative proportions to each other as existed
before such event) comprising eighty percent (80%) or more of the voting power
for all purposes of the surviving or resulting corporation; or (d) the approval
by the stockholders of Neoprobe of a transfer of substantially all of the assets
of Neoprobe to another person other than a transfer to a transferee, eighty
percent (80%) or more of the voting power of which is owned or controlled by
Neoprobe or by the holders of Neoprobe's voting securities issued and
outstanding immediately before such transfer in the same relative proportions to
each other as existed before such event.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as now in effect or hereafter amended.
"Committee" means the Committee of the Board of Directors that
administers the Plan under Section 2.1 below.
"Common Stock" means the common stock, par value $.001 per share, of
the Company.
"Consultant" means any person who provides services to the Company or
any Subsidiary (other than in connection with the offer or sale of securities of
the Company or any Subsidiary in a capital raising transaction), who is neither
an Employee nor a Director and who is a consultant or an adviser to the Company
or any Subsidiary within the meaning of General Instruction A.1. to Form S-8
promulgated by the SEC under the Securities Act of 1933.
"Date of Grant" means the date an Award is first granted.
"Director" means a member of the Board of Directors.
"Effective Date" means the date this Plan is first adopted by the Board
of Directors.
"Employee" means any common law employee of Neoprobe or any Subsidiary
of Neoprobe.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exercise Price" means, with respect to an Option, the amount of
consideration that must be delivered to the Company in order to purchase a
single Share thereunder.
"Fair Market Value of a Share" means the amount determined to be the
fair market value of a single Share by the Committee based upon the trading
price of the Shares, their offering price in public and private offerings by the
Company and such other factors as it deems relevant. In the absence of such a
determination, the Fair Market Value of a Share shall be deemed to be (a) if the
Shares are listed or admitted to trading on a national securities exchange or
the Nasdaq National Market, the per Share closing price regular way on the
principal national securities exchange or the Nasdaq National Market on which
the Shares are listed or admitted to trading on the day prior to the date of
determination or, if no closing price can be determined for the date of
determination, the most recent date for which such price can reasonably be
ascertained, or (b) if the Shares are not listed or admitted to trading on a
national securities exchange or the Nasdaq National Market, the mean between the
representative bid and asked per Share prices in the over-the-counter market at
the closing of the day prior to the date of determination or the most recent
such bid and asked prices then available, as reported by NASDAQ or if the Shares
are not then quoted by NASDAQ as furnished by any market maker selected from
time to time by Neoprobe for that purpose.
"Grantee" means any Participant to whom an Award has been granted.
"Holder" means any Grantee who holds a valid Award and any heir or
legal representative to whom such Grantee's Award has been transferred by will
or the laws of descent and distribution.
"Incentive Stock Option" or "ISO" means an Option intended to comply
with the terms and conditions set forth in Section 422 of the Code.
"Meeting Date" means the date of each annual meeting of the
stockholders of Neoprobe at which Directors are elected.
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<PAGE> 3
"Nonqualified Option" means a Stock Option other than an Incentive
Stock Option.
"Officer" means an officer of the Company as defined in 17 C.F.R.
Section 240.16a-1(f) as now in effect oR hereafter amended.
"Option" or "Stock Option" means a right granted under Article 5 or 6
of the Plan to a Participant to purchase a stated number of Shares.
"Option Agreement" means an agreement evidencing an Option
substantially in the form of Exhibit A or Exhibit B hereto.
"Parent" means a parent of a given corporation as such term is defined
in Section 424(e) of the Code.
"Participant" means a person who is eligible to receive and has
received an Award under the Plan.
"Plan" means this Plan as it may be amended or restated from time to
time.
"Restricted Stock" means Shares purchased under Article 7 of the Plan
that are subject to restrictions on transfer and risks of forfeiture under the
Plan.
"Restricted Stock Purchase Agreement" means a Restricted Stock Purchase
Agreement in the form of Exhibit C attached hereto.
"Rule 16b-3" means Rule 16b-3 (17 C.F.R. Section 240.16b-3) promulgated
under Section 16(b) of the ExchanGe Act as now in effect or hereafter amended.
"SEC" means the Securities and Exchange Commission.
"Shares" means shares of Common Stock.
"Subsidiary" means a subsidiary of a given corporation as such term is
defined in Section 424(f) of the Code.
"Ten Percent Stockholder" means a person who owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary of the Company. Ownership shall
for the purposes of the previous sentence be determined under the rules set
forth in Section 424 of the Code.
"Termination without cause" means a termination of the employment or
consulting relationship of a Grantee that is not for cause and is not occasioned
by the resignation, death or disability of the Grantee.
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles.
Section 1.3. Effect of Definitions. The definitions set forth in
Section 1.1 above shall apply equally to the singular, plural, adjectival,
adverbial and other forms of any of the words and phrases defined regardless of
whether they are capitalized.
ARTICLE 2. ADMINISTRATION.
Section 2.1. Committee. The Plan shall be administered by a committee of
the Board of Directors consisting of two or more Directors, each of whom is a
"disinterested person" as described in paragraph (C)(2)(i) of Rule 16b-3 and is
an "outside director" as described in Code Section 162(m) and the regulations
thereunder (the "Committee"). Unless the Board of Directors designates another
of its committees to administer the Plan, the Plan shall be administered by a
committee consisting of those members of the Compensation Committee of the Board
of Directors who are disinterested persons and are outside directors, but, if
the Compensation Committee is abolished or its membership does not contain two
persons who do comply with the requirements of the first sentence of this
Section 2.1, the Board of Directors shall either reconstitute the Compensation
Committee in compliance with or create another Committee that complies with the
requirements of the first sentence of this Section 2.1 to administer the Plan.
The Committee may be referred to as the Stock Option Committee.
Section 2.2. Authority. Subject to the express provisions of the Plan
and in addition to the powers granted by other sections of the Plan, the
Committee has the authority, in its discretion, to: (a) determine
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<PAGE> 4
the Participants, grant Awards and determine their timing, pricing and amount;
(b) define, prescribe, amend and rescind rules, regulations, procedures, terms
and conditions relating to the Plan; (c) make all other determinations necessary
or advisable for administering the Plan, including, but not limited to,
interpreting the Plan, correcting defects, reconciling inconsistencies and
resolving ambiguities; (d) review and resolve all claims of Employees, Grantees
and Participants; and (e) delegate to the Officers the authority to select
Grantees under Article 5 (other than Officers) and grant Awards to such Grantees
having terms and in aggregate amounts determined by the Committee. The actions
and determinations of the Committee on matters related to the Plan shall be
conclusive and binding upon the Company and all Employees, Grantees and
Participants.
ARTICLE 3. SHARES.
Section 3.1. Number. The aggregate number of Shares in respect of which
Awards may be granted under the Plan shall not exceed one million five hundred
thousand (1,500,000), which number of Shares is hereby reserved for issuance
under the Plan out of the authorized but unissued Shares.
Section 3.2. Cancellations. If any Awards granted under the Plan are
canceled, terminate or expire for any reason without having been exercised in
full, the Shares related to the unexercised portion of an Award shall be
available again for the purposes of the Plan. If any Shares purchased under the
Plan are forfeited for any reason, the Shares shall be available again for
purposes of the Plan.
Section 3.3. Anti-Dilution.
(a) If the Shares are split or if a dividend of Shares is paid
on the Shares, the number of Shares for which each then outstanding Award is
exercisable or which is then Restricted Stock and the number of Shares as to
which Awards may be granted under this Plan shall be increased automatically by
the ratio between the number of Shares outstanding immediately after such event
and the number of Shares outstanding immediately before such event and the
Exercise Price thereof shall be decreased automatically by the same ratio, and
if the Shares are combined into a lesser number of Shares, the number of Shares
for which each then outstanding Award is exercisable or which is then Restricted
Stock and the number of Shares as to which Awards may be granted under the Plan
shall be decreased automatically by such ratio and the Exercise Price thereof
shall be increased automatically by such ratio.
(b) In the event of any other change in the Shares, through
recapitalization, merger, consolidation or exchange of shares or otherwise,
there shall automatically be substituted for each Share subject to an
unexercised Award or which is then Restricted Stock and each Share available for
additional grants of Awards, the number and kind of shares or other securities
into which each outstanding Share was changed, and the Exercise Price shall be
increased or decreased proportionally so that the aggregate Exercise Price for
the securities subject to each Award shall remain the same as immediately before
such event; and the Committee may make such further equitable adjustments in the
Plan and the then outstanding Awards and Restricted Stock Purchase Agreements as
it deems necessary and appropriate including, but not limited to, changing the
number of Shares reserved under the Plan or covered by outstanding Awards, the
Exercise Price of outstanding Awards and Restricted Stock Purchase Agreements
and the vesting conditions of outstanding Awards and Restricted Stock Purchase
Agreements.
Section 3.4. Source. Except as otherwise determined by the Board of
Directors, the Shares issued under the Plan shall be authorized but unissued
Shares. However, Shares which are to be delivered under the Plan may be obtained
by the Company from its treasury, by purchases on the open market or from
private sources, or by issuing authorized but unissued Shares. The proceeds of
the exercise of any Award shall be general corporate funds of the Company. No
Shares may be sold under any Option or Restricted Stock Purchase Agreement for
less than the par value thereof. No fractional Shares shall be issued or sold
under the Plan nor will any cash payment be made in lieu of fractional Shares.
Section 3.5. Rights of a Stockholder. Except as otherwise provided in
any Restricted Stock Purchase Agreement, no Grantee or other person claiming
under or through any Grantee shall have any right, title or interest in or to
any Shares allocated or re-
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<PAGE> 5
served under the Plan or subject to any Award except as to such Shares, if any,
for which certificates representing such Shares have been issued to such
Grantee.
Section 3.6. Securities Laws. No Award shall be exercised nor shall any
Shares or other securities be issued or transferred pursuant to an Award unless
and until all applicable requirements imposed by federal and state securities
laws and by any stock exchanges upon which the Shares may be listed, have been
fully complied with. As a condition precedent to the exercise of an Award or the
issuance of Shares pursuant to the grant or exercise of an Award, the Company
may require the Grantee to take any reasonable action to meet such requirements
including providing undertakings as to the investment intent of the Grantee,
accepting transfer restrictions on the Shares issuable thereunder and providing
opinions of counsel, in form and substance acceptable to the Company, as to the
availability of exemptions from such requirements.
ARTICLE 4. ELIGIBILITY.
Section 4.1. Article 5. Only Employees and Consultants who are not
members of the Committee, shall be eligible to receive Options under Article 5
below.
Section 4.2. Article 6. Only Directors who are not Employees, shall be
eligible to receive Options under the provisions of Article 6 below.
Section 4.3. Article 7. Only Officers shall be eligible to purchase
Restricted Stock under Article 7 below.
ARTICLE 5. STOCK OPTIONS.
Section 5.1. Determinations. The Committee shall determine which
eligible Employees or Consultants shall be granted Options, the number of Shares
for which the Options may be exercised, the times when they shall receive them
and the terms and conditions of individual Option grants (which need not be
identical); provided, however, that the maximum number of Shares with respect to
which Options may be granted during any fiscal year of the Company to any
Employee shall be five hundred thousand (500,000). The Committee may delegate
the authority granted to it in this Section 5.1 pursuant to clause (e) of
Section 2.2 above.
Section 5.2. Exercise Price. The Committee shall determine the Exercise
Price of each Option at the time that it is granted, but in no event shall the
Exercise Price of an Option be less than the Fair Market Value of a Share on the
Date of Grant. If no express determination of the Exercise Price of an Option is
made by the Committee, the Exercise Price thereof is equal to the Fair Market
Value of a Share on the Date of Grant.
Section 5.3. Term. Subject to the rule set forth in the next sentence,
the Committee shall determine the term during which an Option is exercisable at
the time that it is granted. No Option shall be exercisable after the expiration
of ten (10) years from the Date of Grant. If no express determination of the
times when Options are exercisable is made by the Committee:
(a) each Option shall vest and first become exercisable as to
one third (1/3) of the Shares originally subject to the Option (subject to the
rule set forth in Section 5.4(c) below) on each anniversary of the Date of Grant
provided the Grantee thereof has been an Employee or a Consultant, as the case
may be, continuously during the time beginning on the Date of Grant and ending
on the date when such portion of the Option first becomes exercisable; and
(b) each Option shall lapse and cease to be exercisable upon
the earliest of (i) the expiration of ten (10) years from the Date of Grant,
(ii) subject to the rule set forth in Section 5.4(d) below, nine (9) months
after the Grantee ceases to be an Employee or Consultant because of his death or
disability, (iii) ninety (90) days after the Grantee's employment with or
services to the Company or any Subsidiary are terminated by the Company or such
Subsidiary without cause, or (iv) immediately upon termination of the Grantee's
employment with or services to the Company or any Subsidiary by the Company or
any Subsidiary for cause or by the Grantee's resignation.
Where both an Incentive and a Nonqualified Option are granted, the
number of Shares which become exercisable under clause (a) of the previous
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sentence at any time shall be calculated on the basis of the total of the Shares
subject to both Options and the Options shall become exercisable as to that
number of Shares first under the Incentive Stock Option and then under the
Nonqualified Option, unless the rule set forth in Section 5.4(c) below would
defer the exercisability of such Incentive Stock Option, in which case such
Nonqualified Options shall become exercisable first. Notwithstanding the terms
of any Option, the preceding sentence and Section 5.4, all Options that have not
previously been exercised nor lapsed and ceased to be exercisable shall vest and
become exercisable upon the occurrence of any Change in Control if the Grantee
is an Employee or Consultant at time of the Change in Control.
Section 5.4. Incentive Stock Options.
(a) The Committee shall determine whether any Option is an
Incentive Stock Option or a Nonqualified Option at the time that it is granted,
and if no express determination is made by the Committee, all Options granted to
Participants who are Employees and who are not Ten Percent Stockholders are
Incentive Stock Options and all Options granted to Ten Percent Stockholders or
Consultants are Nonqualified Options.
(b) If the Committee grants Incentive Stock Options, they
shall be on such terms and conditions as may be necessary to render them
"incentive stock options" pursuant to Section 422 of the Code.
(c) The aggregate Fair Market Value of the Shares, determined
as of the time the Option is granted, which first become exercisable under all
Incentive Stock Options granted under this Plan or any other plan of the Company
or any Parent or Subsidiary of the Company, shall not exceed one hundred
thousand dollars ($100,000) during any calendar year and if the foregoing limit
would be exceeded in any given calendar year by the terms of any Incentive Stock
Option granted hereunder, the exercisability of such portion of such Option as
would exceed such limit shall be deferred to the first day of the next calendar
year and if such excess involves more than one Option, the exercisability of the
most recently granted Option shall be deferred first.
(d) If the employment of a Participant, who holds an ISO, with
the Company is terminated because of a "disability" (within the meaning of
Section 22(e)(3) of the Code), the unexercised portion of his ISO may only be
exercised within six (6) months after the date on which his employment was
terminated, and only to the extent that such Participant could have otherwise
exercised such ISO as of the date of termination. If a Participant, who holds an
ISO, dies while he is employed by the Company (or within six (6) months after
termination of his employment by reason of a disability or within one (1) month
after termination of his employment without cause), the unexercised portion of
his ISO at the time of his death may only be exercised within six (6) months
after the date of his death, and only to the extent that he could have otherwise
exercised such ISO at the time of his death. In such event, such ISO may be
exercised by the executor or administrator of his estate or by any Holder.
(e) No Ten Percent Stockholder shall be granted an Incentive
Stock Option, unless at the time such Incentive Stock Option is granted, the
Exercise Price thereof is at least one hundred ten percent (110%) of the Fair
Market Value of a Share on the Date of Grant and the Incentive Stock Option by
its terms is not exercisable after the expiration of five (5) years from the
Date of Grant.
(f) If a Grantee exercises an Incentive Stock Option and
disposes of any of the Shares received by such Grantee as a result of such
exercise within two (2) years from the Date of Grant or within one (1) year
after the transfer of such Shares to such Grantee upon such exercise, such
Grantee shall notify the Company of such disposition and the consideration
received as a result thereof and pay or provide for the withholding taxes on
such disposition as required by Section 8.4 below.
(g) An Option that is designated as a Nonqualified Option
under this Plan shall not be treated as an "incentive stock option" as such term
is defined in Section 422(b) of the Code.
Section 5.5. Exercise. An Option shall be exercised by the delivery of
the Option Agreement therefor with the notice of exercise attached thereto
properly completed and duly executed by the Holder
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<PAGE> 7
named therein to the Treasurer of the Company, together with the aggregate
Exercise Price for the number of Shares as to which the Option is being
exercised, after the Option has become exercisable and before it has ceased to
be exercisable. An Option may be exercised as to less than all of the Shares
purchasable thereunder, but not for a fractional share. No Option may be
exercised as to less than one hundred (100) Shares unless it is exercised as to
all of the Shares then available thereunder. If an Option is exercised as to
less than all of the Shares purchasable thereunder, a new duly executed Option
Agreement reflecting the decreased number of Shares exercisable under such
Option, but otherwise of the same tenor, shall be returned to the Holder. The
Committee may, in its sole discretion, and upon such terms and conditions as it
shall determine at or after the Date of Grant, permit the Exercise Price to be
paid in cash, by the tender to the Company of Shares owned by the Holder or by a
combination thereof. If the Committee does not make such determination, the
Exercise Price shall be paid in cash. If any portion of the Exercise Price of an
Option is payable in cash, it may be paid by (a) delivery of a certified or
cashier's check payable to the order of the Company in such amount, (b) wire
transfer of immediately available funds to a bank account designated by the
Company, or (c) reduction of a debt of the Company to the Holder. If any portion
of the Exercise Price of an Option is payable in Shares it may be paid by
delivery of certificates representing a number of Shares having a total Fair
Market Value on the date of delivery equal to or greater than the required
amount, duly endorsed for transfer with all signatures guaranteed by a bank or a
member of the National Association of Securities Dealers with a medallion
guarantee. If more Shares than are necessary to pay such Exercise Price based on
their Fair Market Value on the date of first delivery to the Company are
delivered to the Company, it shall return to the Holder a certificate for the
balance of the whole number of Shares and a check payable to the order of the
Holder for any fraction of a Share. Shares may not be delivered to the Company
as payment for the exercise of an Option, if such Shares have been owned by the
Holder (together with his decedent or testator) for less than six (6) months or
if the disposition of such Shares would require the giving of a notice under
Section 5.4(f) above. Promptly after an Option is properly exercised, the
Company shall issue to the Grantee a certificate representing the Shares
purchased thereunder.
Section 5.6. Option Agreement. Promptly after the Date of Grant,
Neoprobe shall duly execute and deliver to the Grantee an Option Agreement
setting forth the terms of the Option. Option Agreements are not negotiable
instruments or securities (as such term is defined in Article 8 of the Uniform
Commercial Code). Lost and destroyed Option Agreements may be replaced without
bond.
Section 5.7. New Hires. A person to whom the Company is offering
employment may be granted a Nonqualified Option under this Article 5, but any
such grant shall lapse if the person does not subsequently become an Employee
pursuant to such offer.
Section 5.8. Acceleration. Notwithstanding anything else in the Plan,
the Committee may, in its sole discretion, at any time or from time to time
thereafter, accelerate the time at which any Options become exercisable or waive
any provisions of the Plan relating to the manner of payment or procedures for
the exercise of any Option. Any such acceleration may be made effective (a) with
respect to one or more or all Grantees, (b) with respect to some or all of the
Shares subject to an Option of any Grantee or (c) for a period of time ending at
or before the expiration date of any Option.
ARTICLE 6. DIRECTORS' STOCK OPTIONS.
Section 6.1. Grant.
(a) On the Effective Date an Option on three thousand six
hundred (3,600) Shares shall be granted to each Director who is eligible to
receive Options under Section 4.2 above.
(b) On each Meeting Date which occurs after the annual meeting
of stockholders at which this Plan is approved by the stockholders of the
Company, an Option on three thousand six hundred (3,600) Shares or such lesser
number as remain available for granting under Article 3 above shall be
automatically granted to each Director who is eligible to receive Options under
Section 4.2 above.
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<PAGE> 8
(c) Notwithstanding the foregoing, an Option on three thousand six
hundred (3,600) Shares or such lesser number as remain available for granting
under Article 3 above shall be automatically granted to each person who is
elected as a Director by the Board of Directors, who was not a Director during
the time since the most recent Meeting Date, and who is eligible to receive
Options under Section 4.2 above.
Section 6.2. Exercise Price. The Exercise Price of an Option shall be
equal to the Fair Market Value of a Share on the Date of Grant.
Section 6.3. Term. (a) Each Option shall vest and first become
exercisable as to thirty-three and one-third percent (33-1/3%) of the Shares
originally subject to the Option on each Meeting Date which is held more than
six (6) months after the Date of Grant if the Grantee is a Director at the time
of the adjournment of the meeting of stockholders held on such Meeting Date; and
(b) each Option shall lapse and cease to be exercisable upon the earliest of (i)
the expiration of ten (10) years from the Date of Grant, (ii) nine (9) months
after the Grantee ceases to be a Director because of his death or disability,
(iii) immediately upon resignation by the Grantee as a Director, or (iv) thirty
(30) days after the Grantee ceases to be a Director for any reason other than
his death, disability or resignation. Notwithstanding the foregoing, all Options
that have not previously been exercised nor lapsed and ceased to be exercisable
shall vest and become exercisable upon the occurrence of any Change in Control.
Section 6.4. Not Incentive Stock Options. An Option under this Article
6 shall not be treated as an Incentive Stock Option.
Section 6.5. Exercise. An Option shall be exercised by the delivery of
the Option Agreement therefor with the notice of exercise attached thereto
properly completed and duly executed by the Grantee named therein to the
Treasurer of the Company, together with the aggregate Exercise Price for the
number of Shares as to which the Option is being exercised, after the Option has
become exercisable and before it has ceased to be exercisable. An Option may be
exercised as to less than all of the Shares purchasable thereunder but not for a
fractional Share. No Option may be exercised as to less than one hundred (100)
Shares unless it is exercised as to all of the Shares then available thereunder.
If an Option is exercised as to less than all of the Shares purchasable
thereunder, a new duly executed Option Agreement reflecting the decreased number
of Shares exercisable under such Option, but otherwise of the same tenor, shall
be returned to the Grantee. The Exercise Price shall be paid in cash by (a)
delivery of a certified or cashier's check payable to the order of the Company
in such amount, (b) wire transfer of immediately available funds to a bank
account designated by the Company, or (c) reduction of a debt of the Company to
the Grantee. Promptly after an Option is properly exercised, the Company shall
issue to the Grantee a certificate representing the Shares purchased thereunder.
Section 6.6. Option Agreement. Promptly after the Date of Grant,
Neoprobe shall duly execute and deliver to the Grantee an Option Agreement
setting forth the terms of the Option. Option Agreements are neither negotiable
instruments nor securities (as such term is defined in Article 8 of the Uniform
Commercial Code). Lost and destroyed Option Agreements may be replaced without
bond.
Section 6.7. Articles 2 and 5. The provisions of Articles 2 and 5 above
shall not apply to Options granted under this Article 6.
ARTICLE 7. RESTRICTED STOCK.
Section 7.1. Determinations. The Committee shall determine which
Participants may purchase Restricted Stock, the number of shares of Restricted
Stock each Grantee may purchase, the times when they may purchase Restricted
Stock, the vesting and forfeiture provisions of the Restricted Stock and the
purchase price of the Restricted Stock; provided, however, that the maximum
number of shares of Restricted Stock which may be sold during any fiscal year of
the Company to any Employee shall be one hundred thousand (100,000), and that
the vesting parameters so prescribed shall include (a) the attainment of a
preestablished performance goal that satisfies the requirements of Section
162(m) of the Code and the regulations thereunder and (b) the Committee's
certification in writing of such attainment, whether incorporated in the minutes
of the
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<PAGE> 9
Committee or otherwise. Notwithstanding the terms of any Award granted
under this Section 7, all shares of Restricted Stock that have not previously
been forfeited shall vest fully and become transferable upon the occurrence of
any Change in Control.
Section 7.2. Agreements. Once the Committee has made the determinations
required by Section 7.1 above with respect to any Grantee, the appropriate
officers of the Company shall enter into a Restricted Stock Purchase Agreement
with the Grantee setting forth the terms determined by the Committee. No Holder
shall have any right to purchase Restricted Stock, hold Restricted Stock, or
exercise any rights as a stockholder of the Company unless and until such Holder
has executed and delivered an appropriately completed form of Restricted Stock
Purchase Agreement to the Company and the Company has delivered a counterpart
thereof, executed by an appropriate officer of the Company, to the Holder.
Restricted Stock Purchase Agreements are neither negotiable instruments nor
securities (as such term is defined in Article 8 of the Uniform Commercial
Code). Lost and destroyed Restricted Stock Purchase Agreements may be replaced
without bond.
ARTICLE 8. PROVISIONS APPLICABLE TO ALL TYPES OF AWARDS.
Section 8.1. Surrender and Exchange. The Committee may permit the
voluntary surrender of all or a portion of any Award to be conditioned upon the
granting to the Participant of a new Award for the same or a different number of
Shares as the Award surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Award to such Participant. Subject to
the provisions of the Plan, such new Award shall be exercisable at the price,
during the period and on such other terms and conditions as are specified by the
Committee at the time the new Award is granted. Upon surrender, the Award
surrendered shall be canceled and the Shares previously subject to it shall be
available for the grant of other Awards.
Section 8.2. Corporate Mergers and Acquisitions. The Committee may
grant Awards having terms and conditions which vary from those specified in the
Plan if such Awards are granted in substitution for, or in connection with the
assumption of, existing awards granted by another business entity and assumed or
otherwise agreed to be provided for by Neoprobe pursuant to or by reason of a
transaction involving a merger or consolidation of or acquisition of
substantially all of the assets or stock of another business entity that is not
a Subsidiary of Neoprobe prior to such acquisition, with or by Neoprobe or its
Subsidiaries.
Section 8.3. Actions by Committee After Grant. The Committee shall,
subject to the written consent of the Grantee where the action impairs or
adversely alters the rights of the Grantee, have the right at any time and from
time to time after the Date of Grant of any Award to modify the terms of any
Award.
Section 8.4. Withholding. The Company shall have the right to withhold
from any payments due under any Award or due to any Grantee from the Company as
compensation or otherwise the amounts of any federal, state or local withholding
taxes not paid by the Grantee at the time of the exercise or vesting of any
Award or upon a disposition of Shares received upon the exercise of an Incentive
Stock Option. If cash payments sufficient to allow for withholding of taxes are
not made at the time of exercise or vesting of an Award, the Grantee exercising
such Award shall pay to Neoprobe an amount equal to the withholding required to
be made less the withholding otherwise made in cash or, if allowed by the
Committee in its discretion and pursuant to rules adopted by the Committee
consistent with Section 5.5 above, Shares previously owned by the Grantee. The
Company may make such other provisions as it deems appropriate to withhold any
taxes the Company determines are required to be withheld in connection with the
exercise of any Award or upon a disqualifying disposition of Shares received
upon the exercise of an Incentive Stock Option, including, but not limited to,
the withholding of Shares from an Award upon such terms and conditions as the
Committee may provide. The Company may require the Participant to satisfy any
relevant withholding requirements before issuing Shares or delivering any Award
to the Participant.
Section 8.5. Disability. If a Grantee who is an Employee with or
Consultant to the Company is absent from work with the Company because of a
physical or mental disability, for purposes of the
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<PAGE> 10
Plan, such Grantee will not be considered to have ended his employment with the
Company while he has that disability, unless he resigns or the Committee decides
otherwise. If a Grantee who is a Director is absent from meetings of the Board
of Directors because of a physical or mental disability, for purposes of the
Plan, such Grantee will not be considered to have ended his service with the
Board of Directors while he has that disability, unless he resigns or is not
re-elected by the stockholders.
ARTICLE 9. GENERAL PROVISIONS.
Section 9.1. No Right to Employment. Nothing in the Plan or any Award
or any instrument executed pursuant to the Plan will confer upon any Participant
any right to continue to be employed by or provide services to the Company or
affect the right of the Company to terminate the employment of any Participant
or its other relationship with any Participant. Nothing in the Plan or any Award
or any instrument executed pursuant to Article 6 of the Plan will confer upon
any Participant any right to continue to be a Director of the Company or affect
the right of the stockholders to terminate the directorship of any Participant.
Section 9.2. Limited Liability. The liability of the Company under this
Plan or in connection with any exercise of any Award is limited to the
obligations expressly set forth in the Plan and in the grant of any Award, and
no term or provision of this Plan nor of any Award shall be construed to impose
any duty, obligation or liability on the Company not expressly set forth in the
Plan or any grant of any Award.
Section 9.3. Assumption of Awards. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all the assets of the
Company to another corporation, any Awards outstanding theretofore granted or
sold hereunder must be assumed by the surviving or purchasing corporation, with
appropriate adjustments as to the number and kind of shares and price.
Section 9.4. No Transfer. No Award or other benefit under the Plan may
be sold, pledged or otherwise transferred other than by will or the laws of
descent and distribution; and no Award may be exercised during the life of the
Participant to whom it was granted except by such Participant.
Section 9.5. Expenses. All costs and expenses incurred in connection
with the administration of the Plan including any excise tax imposed upon the
transfer of Shares pursuant to the exercise of an Award shall be borne by the
Company.
Section 9.6. Notices. Notices and other communications required or
permitted to be made under the Plan shall be in writing and shall be deemed to
have been duly given if personally delivered or if sent by first class mail
addressed (a) if to a Grantee, at his residence address set forth in the records
of the Company or (b) if to the Company, to its President at its principal
executive office.
Section 9.7. Third Parties. Nothing herein expressed or implied is
intended or shall be construed to give any person other than the Grantees any
rights or remedies under this Plan.
Section 9.8. Saturdays, Sundays and Holidays. Where this Plan
authorizes or requires a payment or performance on a Saturday, Sunday or public
holiday, such payment or performance shall be deemed to be timely if made on the
next succeeding business day; provided, however, that this Section 9.8 shall not
be construed to extend the ten (10) year period referred to in Section 5.3 or
the five (5) year period referred to in Section 5.4(e) above.
Section 9.9. Rules of Construction. The captions and section numbers
appearing in this Plan are inserted only as a matter of convenience. They do not
define, limit or describe the scope or intent of the provisions of this Plan. In
this Plan words in the singular number include the plural, and in the plural
include the singular; and words of the masculine gender include the feminine and
the neuter, and when the sense so indicates words of the neuter gender may refer
to any gender.
Section 9.10. Governing Law. The validity, terms, performance and
enforcement of this Plan
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<PAGE> 11
shall be governed by laws of the State of Delaware that are applicable to
agreements negotiated, executed, delivered and performed solely in the State of
Delaware.
Section 9.11. Effective Date of the Plan. The Plan shall become
effective upon its approval by the affirmative vote of the holders of a majority
of the outstanding Shares present, or represented, and entitled to vote at a
meeting of the stockholders of Neoprobe. Awards may be granted by the Committee
before such approval, but all Awards so granted shall be conditioned on such
approval and shall be void if such approval is not given within twelve (12)
months after the Effective Date. All Options granted under paragraph (a) of
Section 6.1 above shall be conditioned on such approval and shall be void if
such approval is not given within twelve (12) months after the Effective Date.
Section 9.12. Amendment and Termination. No Award shall be granted
under the Plan more than ten (10) years after the Effective Date. The Board of
Directors may at any time terminate the Plan, or make such amendment of the Plan
as it may deem advisable; provided, however, that no amendment shall be
effective without the approval of the stockholders of the Company by the
affirmative vote of the holders of a majority of the outstanding Shares present,
or represented, and entitled to vote at a meeting of stockholders duly held, if
it would:
(a) materially increase the benefits accruing to Participants
under the Plan;
(b) materially increase the number of Shares which may be
issued under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan;
and, further, provided, however, that no amendment or termination of the Plan
shall be effective to alter or impair the rights of a Grantee under any Award
made before the adoption of such amendment or termination by the Board of
Directors, without the written consent of such Grantee. No termination or
amendment of this Plan or any Award nor waiver of any right or requirement under
this Plan or any Award shall be binding on the Company unless it is in a writing
duly entered into its records and executed by a duly authorized Officer. The
provisions of Article 6 of this Plan setting forth the formulae that determine
the Exercise Price of Options granted hereunder, the number of Shares as to
which they are exercisable, the times when they are granted and the persons who
are Participants may not be amended more than once every six (6) months, other
than to comport with changes in the Code, the Employee Retirement Security
Income Act of 1974, as amended, or the rules thereunder.
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EXHIBIT A
NEOPROBE CORPORATION
SUITE 400
425 METRO PLACE NORTH
DUBLIN, OHIO 43017-1367
(Date of Grant)
(Name of Grantee)
(Street)
(City, State, Zip)
Congratulations. You have been granted a Stock Option under Neoprobe's
1996 Stock Incentive Plan (the "Plan") on the following terms:
1. NUMBER OF SHARES. The number of Shares of Common Stock of Neoprobe
Corporation that you may purchase under this Option is:(Number)
2. EXERCISE PRICE. The exercise price to purchase Shares under this
Option is: $(Price) per Share.
3. VESTING. One third (1/3) of the Shares originally subject to this
Option will vest and become exercisable on each anniversary of the
(Date of Grant) if you have been an [Employee][Consultant] of the
Company continuously from the date of this Agreement shown above
through the date when such portion of the Option vests[ subject to the
special rule referred to in paragraph 5 below].
4. LAPSE. This Option will lapse and cease to be exercisable upon the
earliest of:
(i) the expiration of 10 years from the date of this Agreement shown
above,
(ii) [9][6] months after you cease to be an [Employee][Consultant]
because of your death or disability,
(iii)90 days after your [employment with][services to] Neoprobe or any
Subsidiary [is][are] terminated by Neoprobe or such Subsidiary
without cause, or
(iv) immediately upon termination of your [employment with][services
to] Neoprobe or any Subsidiary by Neoprobe or any Subsidiary for
cause or by your resignation.
5. TAXATION. This Option is [an Incentive Stock Option][a Nonqualified
Option].[ Because this Option is an Incentive Stock Option vesting of a
portion of this Option or of other Incentive Stock Options held by you may
be deferred under a special rule set forth in Section 5.4 (c) of the Plan.
If you exercise this Option and dispose of any of the Shares received by
you as a result of such exercise within two years from the date above or
within one year after the transfer of such Shares to you upon such
exercise, you must notify Neoprobe of such disposition and the amount
received as a result thereof and pay or provide for the withholding taxes
on such disposition.] [You will have taxable income upon the exercise of
this Option. At that time, you must pay to Neoprobe an amount equal to the
required federal, state, and local tax withholding less any withholding
otherwise made from your salary or bonus. You must satisfy any relevant
withholding requirements before Neoprobe issues Shares to you.]
6. EXERCISE. This Option may be exercised by the delivery of this Agreement
with the notice of exercise attached hereto properly completed and signed
by you to the Treasurer of the Company, together with the aggregate
Exercise Price for the number of Shares as to which the Option is being
exercised, after the Option has become exercisable and before it has ceased
to be exercisable. The Exercise Price must be paid in cash by
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<PAGE> 13
(a) delivery of a certified or cashier's check payable to the order of
Neoprobe in such amount, (b) wire transfer of immediately available funds
to a bank account designated by Neoprobe, or (c) reduction of a debt of
Neoprobe to you. This Option may be exercised as to less than all of the
Shares purchasable hereunder, but not for a fractional share, nor may it be
exercised as to less than one hundred (100) Shares unless it is exercised
as to all of the Shares then available hereunder. If this Option is
exercised as to less than all of the Shares purchasable hereunder, a new
duly executed Option Agreement reflecting the decreased number of Shares
exercisable under such Option, but otherwise of the same tenor, will be
returned to you.
7. NO TRANSFER. This Option may not be sold, pledged nor otherwise
transferred other than by will or the laws of descent and distribution; and
it may only be exercised during your lifetime by you. This Agreement is
neither a negotiable instrument nor a security (as such term is defined in
Article 8 of the Uniform Commercial Code).
8. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment
agreement and nothing contained herein gives you any right to continue to
be employed by or provide services to Neoprobe or affects the right of
Neoprobe to terminate your employment or other relationship with you.
9. PLAN CONTROLS. This Agreement is an Option Agreement (as such term is
defined in the Plan) under Article 5 of the Plan. The terms of this
Agreement are subject to, and controlled by, the terms of the Plan, as it
is now in effect or may be amended from time to time hereafter, which are
incorporated herein as if they were set forth in full. Any words or phrases
defined in the Plan have the same meanings in this Agreement. Neoprobe will
provide you with a copy of the Plan promptly upon your written or oral
request made to its Vice President--Finance and Administration.
10. MISCELLANEOUS. This Agreement sets forth the entire agreement of the
parties with respect to the subject matter hereof and it supersedes and
discharges all prior agreements (written or oral) and negotiations and all
contemporaneous oral agreements concerning such subject matter. This
Agreement may not be amended or terminated except by a writing signed by
the party against whom any such amendment or termination is sought. If any
one or more provisions of this Agreement shall be found to be illegal or
unenforceable in any respect, the validity and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby. This Agreement shall be governed by the laws of the State of
Delaware.
Please acknowledge your acceptance of this Agreement by signing the
enclosed copy in the space provided below and returning it promptly to Neoprobe.
NEOPROBE CORPORATION
By:_____________________________________
(Name of Officer), (Title)
Accepted and Agreed to as of the date first set forth above:
________________________________________
(Name of Grantee)
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<PAGE> 14
OPTION EXERCISE FORM
The undersigned hereby exercises the right to purchase
_____________________________________ shares of Common Stock of Neoprobe
Corporation pursuant to the Option Agreement dated (Date of Grant) under the
Neoprobe Corporation 1996 Stock Incentive Plan.
Date: __________________________________
___________________________________
(Name of Grantee)
___________________________________
Sign and complete this Option Exercise Form and deliver it to:
Neoprobe Corporation
Att'n: Treasurer
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
together with the option price in cash by (a) delivery of a certified or
cashier's check payable to the order of Neoprobe in such amount, (b) wire
transfer of immediately available funds to a bank account designated by
Neoprobe, or (c) reduction of a debt of Neoprobe to you.
-3-
<PAGE> 15
EXHIBIT B
NEOPROBE CORPORATION
SUITE 400
425 METRO PLACE NORTH
DUBLIN, OHIO 43017-1367
(Date of Grant)
(Name of Grantee)
(Street)
(City, State, Zip)
Congratulations. You have been granted a Stock Option under Neoprobe's
Stock Option and Restricted Stock Purchase Plan (the "Plan") on the following
terms:
1. NUMBER OF SHARES. The number of Shares of Common Stock of Neoprobe
Corporation that you may purchase under this Option is three thousand six
hundred (3,600).
2. EXERCISE PRICE. The exercise price to purchase Shares under this Option
is: $(Price) per Share.
3. VESTING. Thirty-three and one-third percent (33-1/3%) of the Shares
originally subject to this Option will vest and become exercisable on each
Meeting Date which is held more than six months after the date of this
Agreement shown above if you are a Director at the time of the adjournment
of the meeting of stockholders held on such Meeting Date.
4. LAPSE. This Option will lapse and cease to be exercisable upon the
earliest of:
(i) the expiration of 10 years from the date of this Agreement shown
above,
(ii) 9 months after you cease to be a Director because of your death or
disability,
(iii) immediately upon your resignation as a Director, or
(iv) 30 days after you cease to be a Director for any reason other than
your death, disability or resignation..
5. TAXATION. This Option is a Nonqualified Option. You will have taxable
income upon the exercise of this Option.
6. EXERCISE. This Option may be exercised by the delivery of this Agreement
with the notice of exercise attached hereto properly completed and signed
by you to the Treasurer of the Company, together with the aggregate
Exercise Price for the number of Shares as to which the Option is being
exercised, after the Option has become exercisable and before it has ceased
to be exercisable. The Exercise Price must be paid in cash by (a) delivery
of a certified or cashier's check payable to the order of Neoprobe in such
amount, (b) wire transfer of immediately available funds to a bank account
designated by Neoprobe, or (c) reduction of a debt of Neoprobe to you. This
Option may be exercised as to less than all of the Shares purchasable
hereunder, but not for a fractional share, nor may it be exercised as to
less than one hundred (100) Shares unless it is exercised as to all of the
Shares then available hereunder. If this Option is exercised as to less
than all of the Shares purchasable hereunder, a new duly executed Option
Agreement reflecting the decreased number of Shares exercisable under such
Option, but otherwise of the same tenor, will be returned to you.
7. NO TRANSFER. This Option may not be sold, pledged nor otherwise
transferred other than by will or the laws of descent and distribution; and
it may only be exercised during your lifetime by you. This Agreement is
-4-
<PAGE> 16
neither a negotiable instrument nor a security (as such term is defined in
Article 8 of the Uniform Commercial Code).
8. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment
agreement and nothing contained herein gives you any right to continue to
be a Director of the Company or affect the right of the stockholders to
terminate your directorship.
9. PLAN CONTROLS. This Agreement is an Option Agreement (as such term is
defined in the Plan) under Article 6 of the Plan. The terms of this
Agreement are subject to, and controlled by, the terms of the Plan, as it
is now in effect or may be amended from time to time hereafter, which are
incorporated herein as if they were set forth in full. Any words or phrases
defined in the Plan have the same meanings in this Agreement. Neoprobe will
provide you with a copy of the Plan promptly upon your written or oral
request made to its Vice President--Finance and Administration.
10. MISCELLANEOUS. This Agreement sets forth the entire agreement of the
parties with respect to the subject matter hereof and it supersedes and
discharges all prior agreements (written or oral) and negotiations and all
contemporaneous oral agreements concerning such subject matter. This
Agreement may not be amended or terminated except by a writing signed by
the party against whom any such amendment or termination is sought. If any
one or more provisions of this Agreement shall be found to be illegal or
unenforceable in any respect, the validity and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby. This Agreement shall be governed by the laws of the State of
Delaware.
Please acknowledge your acceptance of this Agreement by signing the
enclosed copy in the space provided below and returning it promptly to Neoprobe.
NEOPROBE CORPORATION
By:_____________________________________
(Name of Officer), (Title)
Accepted and Agreed to as of the date first set forth above:
_____________________________________________
(Name of Grantee)
-5-
<PAGE> 17
OPTION EXERCISE FORM
The undersigned hereby exercises the right to purchase
_____________________________________ shares of Common Stock of Neoprobe
Corporation pursuant to the Option Agreement dated (Date of Grant) under the
Neoprobe Corporation Stock Option and Restricted Stock Purchase Plan.
Date: __________________________________
______________________________
(Name of Grantee)
___________________________________
Sign and complete this Option Exercise Form and deliver it to:
Neoprobe Corporation
Att'n: Treasurer
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
together with the option price in cash by (a) delivery of a certified or
cashier's check payable to the order of Neoprobe in such amount, (b) wire
transfer of immediately available funds to a bank account designated by
Neoprobe, or (c) reduction of a debt of Neoprobe to you.
-6-
<PAGE> 18
EXHIBIT C
RESTRICTED STOCK PURCHASE AGREEMENT
NEOPROBE CORPORATION
SUITE 400
425 METRO PLACE NORTH
DUBLIN, OHIO 43017-1367
(Date of Grant)
(Name of Grantee)
(Street)
(City, State, Zip)
Congratulations. You (the "Executive") have been granted a right to
purchase Restricted Stock under the Company's 1996 Stock Incentive Plan (the
"Plan") on the following terms:
1. PURCHASE AND SALE.
(a) On the terms and subject to the conditions set forth in
this Agreement, the Executive hereby subscribes for and agrees to purchase _____
shares of Common Stock (the "Restricted Stock") for and in consideration of a
payment to the Company by the Executive of ________________ per share.
Concurrently with the execution of this Agreement, the Executive has delivered
to the Company his check drawn on sufficient funds and payable to the order of
the Company in the amount of $ ________, receipt of which is acknowledged by the
Company. The Executive agrees to deliver to the Secretary of the Company the
certificates representing the Restricted Stock together with stock powers duly
endorsed in blank promptly upon receipt thereof from the transfer agent of the
Company.
(b) The fair market value of Common Stock is demonstrated by
the closing price on the _____________________ of such securities on the
business day before the date first set forth above which was $________. The
Executive and the Company intend that the transactions provided for in this
Agreement will be governed by the provisions of Section 83(a) of the Internal
Revenue Code of 1986.
2. TRANSFER RESTRICTIONS.
(a) In consideration of the difference between the purchase price of
the Restricted Stock set forth in Section 1 above and its fair market value
without the restrictions and risk of forfeiture set forth herein, the Executive
agrees that, unless and until any of the Restricted Stock vests and becomes
transferable as provided in Section 4 below, the Executive may neither transfer,
sell, assign nor pledge any of the Restricted Stock.
(b) This paragraph may be deleted if Shares issuable under the Plan are
registered. The Executive understands the Restricted Stock has neither been
registered under the Securities Act of 1933 nor under any applicable state
securities law on the ground that the sale provided for in this Agreement and
the issuance of securities hereunder are exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) thereof, but the Company's
reliance on such exemption is predicated on the Executive's representations set
forth herein and that in order to obtain such exemption, the transfer of such
securities is restricted by this paragraph and the legend set forth below. The
Executive represents and warrants to the Company that he or she is purchasing
the Restricted Stock for his or her own account and not for other persons and
for investment and not with a view to the distribution of any of the Restricted
Stock. The Executive will not offer for sale, sell or otherwise transfer any
Restricted
-7-
<PAGE> 19
Stock, even after it has vested and has become transferable under Section 4
below, unless such securities have been registered under the Securities Act of
1933 and under applicable state securities laws or such securities or their
offer, sale or transfer are exempt from such registration and the Company has
received an opinion of counsel, in form and substance reasonably satisfactory to
the Company, to that effect.
(c) Any certificate representing any Restricted Stock issued
hereunder shall bear the following legend:
THE TRANSFER OF THESE SECURITIES IS RESTRICTED BY, AND SUCH
SECURITIES ARE SUBJECT TO A RISK OF FORFEITURE, UNDER A RESTRICTED
STOCK PURCHASE AGREEMENT BETWEEN THE REGISTERED OWNER HEREOF AND THE
ISSUER DATED __________, 199_. The remainder of this paragraph may
be deleted if Shares issuable under the Plan are registered. THESE
SECURITIES HAVE NEITHER BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 NOR UNDER ANY APPLICABLE STATE SECURITIES LAW. THESE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED UNLESS
THEY ARE REGISTERED UNDER THE SECURITIES ACT OF 1933 AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THEY OR SUCH OFFER, SALE OR
TRANSFER ARE EXEMPT FROM SUCH REGISTRATION AND THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY IN FORM AND SUBSTANCE, TO THAT EFFECT.
3. FORFEITURE. The Executive will forfeit any portion of the Restricted
Stock purchased under this Agreement that has not vested and become transferable
on the earliest of:
(a) the expiration of 10 years from the date of this Agreement,
(b) nine months after Executive ceases to be an Employee because of
Executive's death or disability,
(c) 90 days after the termination without cause of Executive's
employment with the Employer, or
(d) immediately upon termination of Executive's employment with the
Employer by the Employer for cause or by Executive's
resignation.
Upon the occurrence of such forfeiture all of the right, title and interest in
and to any shares of Restricted Stock which has been forfeited shall be
terminated and the Company shall cause the certificates representing the
forfeited shares to be canceled or transferred free and clear of all
restrictions to its treasury and the Company shall pay to the Executive
____________ per share for each share so forfeited.
4. VESTING PROVISIONS.
(a) A portion of the Restricted Stock that has not previously
been forfeited under Section 3 above shall vest and become transferable if and
when the Company attains (and the Committee certifies in its minutes or another
writing the attainment of) a preestablished performance goal that satisfies the
requirements of Section 162(m) of the Code and the regulations thereunder as
follows: [* INSERT VESTING FORMULA BASED ON ONE OR MORE BUSINESS CRITERIA THAT
APPLY TO THE INDIVIDUAL EXECUTIVE, A BUSINESS UNIT OR THE COMPANY AS A WHOLE.
SUCH BUSINESS CRITERIA MAY INCLUDE ONE OR A COMBINATION OF STOCK PRICE, TOTAL
STOCKHOLDER RETURN, EARNINGS PER SHARE OR RETURN ON EQUITY. OTHER BUSINESS
CRITERIA MAY BE STATISTICS RELATING TO ECONOMIC PERFORMANCE INCLUDING REVENUE,
OPERATING EXPENSES, OR EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION; OR THE BUSINESS CRITERIA MAY BE THE ACHIEVEMENT OF A
NON-STATISTICAL GOAL SUCH AS THE INTRODUCTION, TESTING OR LICENSING OF A NEW
PRODUCT, LICENSING OR ACQUIRING ASSETS OR RIGHTS, ENTERING INTO A JOINT VENTURE
OR STRATEGIC ALLIANCE, OR A CHANGE IN CONTROL OF THE COMPANY OR ANOTHER MERGER
OR ACQUISITION.. *].
-8-
<PAGE> 20
(b) When any portion of the Restricted Stock vests and becomes
transferable, the Company shall promptly deliver a certificate (free of all
adverse claims and transfer restrictions other than the restriction imposed by
paragraph (b) of Section 2 above) representing the number of shares constituting
the vested and transferable portion of the Restricted Stock to the Executive at
his or her address given above and such shares shall no longer be deemed to be
Restricted Stock subject to the terms and conditions of this Agreement other
than paragraph (b) of Section 2 above.
5. RIGHTS; STOCK DIVIDENDS. Except for the restrictions on transfer set
forth in Section 2 and the possibility of forfeiture set forth in Section 3,
upon the issuance of a certificate representing shares of Restricted Stock, the
Executive will have all other rights in such shares, including the right to vote
such shares and receive dividends other than dividends on or distributions of
shares of any class of stock issued by the Company which dividends or
distributions shall be delivered to the Company under the same restrictions on
transfer and possibility of forfeitures as the shares of Restricted Stock from
which they derive. Upon the occurrence of such a dividend or distribution the
dollar amounts set forth in Paragraph (a) of Section 4 shall be appropriately
adjusted by the Committee.
6. TAXATION. Both you and we intend that the transactions provided for
in this Agreement will be governed by the provisions of Section 83(a) of the
Internal Revenue Code of 1986. You will have taxable income upon the vesting of
Restricted Stock. At that time, you must pay to the Company an amount equal to
the required federal, state, and local tax withholding less any withholding
otherwise made from your salary or bonus. You must satisfy any relevant
withholding requirements before the Company issues Shares to you.
7. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment
agreement and nothing contained herein gives you any right to continue to be
employed by or provide services to the Company or affects the right of the
Company to terminate your employment or other relationship with you.
8. PLAN CONTROLS. This Agreement is a Restricted Stock Purchase
Agreement (as such term is defined in the Plan) under Article 7 of the Plan. The
terms of this Agreement are subject to, and controlled by, the terms of the
Plan, as it is now in effect or may be amended from time to time hereafter,
which are incorporated herein as if they were set forth in full. Any words or
phrases defined in the Plan have the same meanings in this Agreement. The
Company will provide you with a copy of the Plan promptly upon your written or
oral request made to its Treasurer.
9. MISCELLANEOUS. This Agreement sets forth the entire agreement of the
parties with respect to the subject matter hereof and it supersedes and
discharges all prior agreements (written or oral) and negotiations and all
contemporaneous oral agreements concerning such subject matter. This Agreement
may not be amended or terminated except by a writing signed by the party against
whom any such amendment or termination is sought. If any one or more provisions
of this Agreement shall be found to be illegal or unenforceable in any respect,
the validity and enforceability of the remaining provisions hereof shall not in
any way be affected or impaired thereby. This Agreement shall be governed by the
laws of the State of Delaware.
-9-
<PAGE> 21
Please acknowledge your acceptance of this Agreement by signing the
enclosed copy in the space provided below and returning it promptly to the
Company.
NEOPROBE CORPORATION
By: ___________________________________
(Name of Officer), (Title)
Accepted and Agreed to as of the date first set forth above:
___________________________________
(Name of Grantee)
-10-
<PAGE> 1
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Exhibit 10.3.42
SUPPLY AGREEMENT
This Agreement is made effective as of April 1, 1996 ("Effective
Date"), by and between Neoprobe-Peptor JV L.L.C., a limited liability company of
the State of Delaware, U.S.A. ("JV"), and Peptor Ltd., an Israeli company
("Peptor").
RECITALS:
WHEREAS, Peptor, and Neoprobe Corporation, a Delaware, U.S.A.
corporation ("Neoprobe") have agreed to the formation of JV between Neoprobe and
Peptor Corp, a corporation of the State of Delaware, by the concurrent entry
into a Limited Liability Company Agreement between Neoprobe and Peptor Corp.;
WHEREAS, Peptor has developed or obtained technology enabling it to
manufacture proteins of interest to JV;
WHEREAS, Peptor is willing to become an exclusive supplier of proteins
to JV; and WHEREAS, JV is willing to purchase its entire requirements of
proteins from Peptor;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, JV and Peptor agree as follows:
AGREEMENT:
ARTICLE I. - SUPPLY
1.1 (a) During the Term of this Agreement, Peptor agrees to
manufacture Peptor Proprietary Proteins as defined in the
Limited Liability Company Agreement ("PRODUCT") according to
Specifications And Test Methods set forth in Exhibit A hereto
(hereinafter "SPECIFICATIONS"). During the Term of this
Agreement or any extensions thereof, Peptor shall use
reasonable best efforts to meet JV's PRODUCT order and
delivery requirements, as advised from JV from time to time.
(b) During the Term of this Agreement, Company agrees to buy its
entire requirements of PRODUCT from Peptor, subject to the
terms and conditions set forth herein.
(c) JV and Peptor agree that Peptor, if it so determines, may on a
contract basis, manufacture proteins for itself or for
companies other than JV. Notwithstanding the foregoing,
Peptor, in allocating its production capacity, shall give
priority to the supply requirements of JV.
<PAGE> 2
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 2 Supply Agreement
Peptor Ltd.
(d) The commercial price per vial of the PRODUCT during the Term
hereof shall be * . Peptor agrees that the vials of
PRODUCT shall meet the requirements set out in the
SPECIFICATIONS.
(e) "Commercial Sale" for present purposes means the earlier of
the sale of the PRODUCT in the United States has received
approval by the United States Food and PRODUCT Administration
("FDA"), or has received approval by the appropriate
regulatory agency in at least two (2) of the following four
(4) countries: United Kingdom, France, Germany, and Italy
("European Authorities").
1.2 (a) Upon written notice by JV to Peptor, Peptor shall at the
expense of JV submit an ELA and updated PRODUCT Master File
("DMF"), if required, to the FDA in sufficient detail
describing the manufacturing of the PRODUCT and Peptor's
facilities as may be required for the "Manufacturing Section"
of JV's IND. JV shall advise Peptor, at Peptor's request, in
matters pertaining to the content and requirements of the DMF
and ELA. Peptor also agrees to supply a copy of sections of
their DMF directly relating to the PRODUCT or any portion
thereof to JV upon JV's request. Peptor shall give JV the
right to reference such DMF.
(b) Upon written notice by Peptor to JV, Peptor shall at its own
expense submit and file for corresponding approval to market
the PRODUCT in countries in the TERRITORY. Peptor agrees to
supply copies of all papers relating to this task to JV.
JV shall cooperate with Peptor in this task.
1.3 Peptor warrants that the PRODUCT:
(i) shall meet the SPECIFICATIONS which include the obligation of
Peptor to comply with all applicable Good Laboratory Practices
("GLP's"), Good Manufacturing Practices ("cGMP's") and other
such applicable regulations of the FDA and European
Authorities;
(ii) shall be packaged and shipped to Neoprobe Corporation or its
designee for radiolabeling in a manner consistent with the
SPECIFICATIONS; and
* Omitted and filed separately under Rule 24b-2 pursuant to which
Neoprobe Corporation has requested Confidential Treatment of this
information.
<PAGE> 3
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 3 Supply Agreement
Peptor Ltd.
(iii) shall otherwise comply with the requirements of the FDA and
European Authorities for commercial sale of the PRODUCT.
Peptor further warrants that it shall convey good title to all
quantities of PRODUCT supplied hereunder.
1.4 Peptor shall test each batch of PRODUCT prior to shipment and shall
retain records (for the period of time required by cGMP regulations)
pertaining to each such test. The tests and analyses to be conducted
shall be specified in Exhibit A hereto and may be changed by mutual
written consent of the parties.
1.5 JV shall have the right, at reasonable times and with reasonable prior
notice, to inspect Peptor's production facilities to confirm Peptor's
compliance with cGMP's and the SPECIFICATIONS, and to review the
records under this Article, and other testing standards. In the event
that JV observes a condition which causes it to believe that the
PRODUCT is not being manufactured in accordance with cGMP's, the
SPECIFICATIONS, or other testing standards, Peptor and JV shall
immediately meet to discuss the concerns and any additions or
modifications to bring the facilities and production procedures into
compliance. The parties agree to use their reasonable efforts to modify
facilities and/or production procedures to bring the manufacture of the
PRODUCT into full compliance based on the parties' understanding of
such regulations. In the event the parties cannot resolve the issue of
compliance, a third party expert, acceptable to both parties and bound
by confidentiality, shall be employed to resolve the issue and the
decision by such third party shall be binding. The cost incurred with
respect to said expert shall be borne by JV.
1.6 At JV's request and with reasonable prior notice to Peptor, Peptor
agrees to permit the FDA to inspect Peptor's production facilities.
1.7 Peptor shall submit, at its expense and with the consent and
cooperation of JV as set forth in this Article, an Establishment
License Application ("ELA"), if required, to manufacture the PRODUCT
commercially. JV shall promptly advise Peptor, at Peptor's request, in
matters pertaining to U.S. regulatory requirements relating to the
manufacture of the PRODUCT.
1.8 Should JV request Peptor to provide proof of manufacture of the PRODUCT
to a regulatory authority, Peptor agrees to cooperate and supply
information in response to
<PAGE> 4
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 4 Supply Agreement
Peptor Ltd.
such request. JV agrees to reimburse any out of pocket expenses to
Peptor for their effort.
1.9 With respect to supply of the PRODUCT for use in a European country,
the provisions of this Article I shall be construed to encompass the
various equivalent (or most nearly equivalent) regulatory agencies and
regulations applicable. The parties agree to negotiate in good faith
any modifications to the provisions hereof occasioned by virtue of the
supply of the PRODUCT to a European country.
1.10 JV hereby grants to Peptor during the Term hereof a non-exclusive
irrevocable and unconditional option to supply additional products upon
terms and conditions to be mutually agreed upon by the parties hereto
acting in good faith.
ARTICLE II - PAYMENTS
JV agrees to pay all invoices submitted by Peptor hereunder within
thirty (30) days thereof.
ARTICLE III - CONFIDENTIALITY
3.1 Both parties to this Agreement agree to maintain any information
received from the other party under this Agreement ("INFORMATION") in
confidence and not disclose the INFORMATION to any person or entity
that is not a party to this Agreement.
3.2 INFORMATION exchanged under this Agreement may be in any form such as
written or oral. Upon termination of the Agreement, if requested by the
disclosing party, the receiving party will return any INFORMATION
received in tangible form together with any copies receiving party may
have made.
3.3 The foregoing obligations shall not apply to INFORMATION which Peptor
or JV can demonstrate falls within one of the following exceptions.
(a) is, or without the fault of the receiving party becomes, available
to the public; or
(b) was known to the receiving party prior to receipt from the
disclosing party; or
(c) was received without restriction from a third party having the
right to make such disclosure.
If JV or Peptor breach their confidentiality obligations and the
INFORMATION thereby becomes available to the public, the
non-breaching party (either JV or Peptor) is not thereby
released from their confidentiality obligations under this
Agreement.
<PAGE> 5
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 5 Supply Agreement
Peptor Ltd.
3.4 INFORMATION disclosed to a receiving party in Article 3.1 which is
specific shall not be deemed to be within any of the above exceptions
merely because it is embraced by more general information coming within
one of the exceptions. Any combination of features disclosed to a
Receiving Party shall not be deemed to be within any exception merely
because individual features thereof fall within one of the exceptions.
3.5 A receiving party shall notify the disclosing party promptly in
writing, after receipt thereof, with supporting evidence when any
INFORMATION received is considered by a receiving party to fall within
any of the exceptions of Article 3.3.
3.6 The confidentiality provisions of the Agreement will remain in effect
for five (5) years from the expiration or termination of this
Agreement.
ARTICLE IV - TERM
The Term of this Agreement shall extend for thirty-six (36) months
after Commercial Sales begin. Thereafter, the Term shall automatically be
renewed for like periods of thirty-six (36) months unless JV notifies the Peptor
within one (1) year from the end of each thirty-six (36) month term that the
Agreement is to be terminated.
ARTICLE V - TERMINATION
5.1 Should JV terminate this Agreement for whatever reason, Peptor shall be
entitled to retain all the payments made to Peptor by JV.
5.2 In any event, any termination of this Agreement shall not relieve JV or
Peptor of their respective obligations of confidentiality under Article
III.
ARTICLE VI - FORCE MAJEURE
6.1 Neither party shall be responsible in any way to the other party for
failure to perform any of its obligations under this Agreement when
such failure is due to any war, fire, flood, labor trouble, strike,
natural calamity, accident, riot, act of governmental authority,
inability or economic impracticality to comply with requirements
imposed by environmental regulations or orders, Acts of God, or other
similar contingencies beyond the reasonable control of either party.
6.2 Peptor shall not be held liable to JV for default or delay in the
manufacture or delivery of the PRODUCT due to an act of God, accident,
fire, flood, storm, riot, sabotage,
<PAGE> 6
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 6 Supply Agreement
Peptor Ltd.
explosion, strike, labor disturbance, national defense requirements,
governmental law, ordinance rule or regulation, whether valid or
invalid, inability to obtain electricity or other types of energy, raw
materials, labor, equipment or transportation, or any similar
contingency beyond its reasonable control whether the contingency is of
the same class as those enumerated above, it being expressly agreed
that such enumeration shall be non-exclusive (each contingency is
referred to in this Agreement as an ("event of force majeure"). Peptor
shall give JV immediate notice of any occurrence of any such
contingency.
ARTICLE VII - EXPORT CONTROL
7.1 Peptor and JV also agree not to disclose any INFORMATION, except that
which becomes generally known to the public under the exceptions to
confidentiality given in Article IV, or to re-export, either directly
or indirectly, any technical data relating to commodities incorporating
INFORMATION or any direct product of the technical data (the PRODUCT)
to Albania, Bulgaria, Cambodia, Cuba, Czech Republic (former
Czechoslovakia), Estonia, Haiti, Iran, Iraq, Laos, Latvia, Lithuania,
Libya, Mongolian People's Republic, North Korea, People's Republic of
China, Poland, Slovak Republic (former Czechoslovakia), South African
military and police, Romania, Syria, former republics and geographic
regions of the Union of Soviet Socialist Republics, Vietnam, Yugoslavia
(Serbia and Montenegro) or any other country that may in the future be
covered by the United States Export Administration Act of 1979 as
amended and the Trading With the Enemy Act and the regulations of the
U.S. Departments of Commerce, Defense, State, Energy and Treasury
pursuant thereto. Peptor and JV also agree that they will not
re-export, either directly or indirectly, such INFORMATION, technical
data or direct products (the PRODUCT) to any country other than those
listed in the preceding sentence without first obtaining a written
letter of assurance equivalent in scope to this paragraph or the
appropriate license from the U.S. government.
7.2 With regard to the preceding paragraph, JV shall provide Peptor with
notice of any additions or deletions to the above countries listed and
which change would impact this Agreement, with the notice to be sent as
specified in Article XI.
7.3 Peptor agrees to use reasonable efforts to comply with this Article and
agrees to indemnify JV for any intentional breach incurred by Peptor's
shipment of the PRODUCT, or
<PAGE> 7
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 7 Supply Agreement
Peptor Ltd.
technical data relating to commodities incorporating INFORMATION, in
contravention of this Article.
7.4 This Article shall survive any termination of the Agreement.
ARTICLE VIII - CHOICE OF LAW
8.1 The provisions of this Agreement shall be governed and construed under
the laws of the State of Ohio.
8.2 If any provision of this Agreement shall be found or held to be invalid
or unenforceable, the meaning of such provision shall be construed, to
the extent feasible, so as to render the provision enforceable, and if
no feasible interpretation would save such provision, it shall be
severed from the remainder of this Agreement, which shall remain in
full force and effect unless the severed provision is essential and
material to the rights or benefits received by any party hereto. In
such event, the parties shall use their best efforts to negotiate, in
good faith, a substitute, valid, and enforceable provision or agreement
which most nearly effectuates the parties' intent into entering into
this Agreement.
ARTICLE IX - INDEMNITIES
9.1 JV shall indemnify Peptor for and save Peptor harmless from all losses,
costs or damage (including reasonable attorney fees and expenses)
suffered or incurred by Peptor in respect of damage to or destruction
of property, personal injury or death which may be caused by or arise
from, either wholly or in part, from JV's negligence or that of its
directors, officers, or employees, agents, or representatives or those
third parties to whom JV directs Peptor to ship the product.
9.2 Peptor shall indemnify JV for and save JV harmless from all losses,
costs or damage (including reasonable attorney fees and expenses)
suffered or incurred by JV in respect of damage to or destruction of
property, personal injury or death which may be caused by or arise from
Peptor's negligence or that of its directors, officers, or employees,
agents or representatives.
9.3 This Article shall survive any termination of this Agreement.
<PAGE> 8
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 8 Supply Agreement
Peptor Ltd.
ARTICLE X - WAIVER
10.1 No failure on the part of any party to exercise and no delay in
exercising any right, power, remedy, or privilege under this Agreement,
or provided by statute or at law or in equity or otherwise, including
without limitation, the right or power to terminate this Agreement,
shall impair, prejudice, or constitute a waiver of any such right,
power, remedy, or privilege, or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single
or partial exercise of any such right, power, remedy, or privilege
preclude any other or further exercise thereof or the exercise of any
other right, power, remedy, or privilege.
10.2 No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure by any party
therefrom, shall in any event be effective unless the same shall be in
writing specifically identifying this Agreement and the provision
intended to be amended, modified, waived, terminated, or discharged and
any such amendment, modification, waiver, termination or discharge
shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of
dealing or performance or any other matter not set forth in an
agreement in writing and signed by both parties hereto.
ARTICLE XI - NOTICE
All notices, requests, and other communications to JV or Peptor
hereunder shall be in writing (including telecopy or similar electronic
transmissions), shall refer specifically to this Agreement and shall be
personally delivered or sent by telecopy or other electronic facsimile
transmission or by registered mail, or certified mail, return receipt requested,
postage prepaid, in each case to the respective address specified below (or such
other address as may be specified in writing to the other party hereto) or in
the case of a telecopy or other electronic transmission, to such party by means
confirmed in writing or by agreement:
<PAGE> 9
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 9 Supply Agreement
Peptor Ltd.
If to JV: with a copy to:
Neoprobe-Peptor JV L.L.C. J.K. Mueller, Jr., Esq.
Attention: David C. Bupp MUELLER AND SMITH, L.P.A.
425 Metro Place North MUELLER-SMITH BUILDING
Suite 400 7700 Rivers Edge Drive
Dublin, OH 43017-1367 Columbus, Ohio 43235
tel.: 614-793-7500 tel.: 614-436-0600
fax: 614-793-7522 fax: 614-436-0057
If to Peptor:
Yoram Karmon, President
Peptor Ltd.
Kiryat Weizmann
Rehovot 76326
ISRAEL
tel.:
fax:
Any notice or communication given in conformity with this Article XI shall be
deemed to be effective when received by the addressee, if delivered by hand,
telecopy or other electronic transmission, and seven (7) days after mailing, if
mailed.
ARTICLE XII - HEADINGS
The headings used in this Agreement are inserted for reference and
shall not be deemed as part of the text.
ARTICLE XIII - UNDERSTANDING
13.1 This Agreement represents the entire understanding of the parties with
respect to the subject matter hereof. All agreements, covenants,
representations, warranties and indemnities set forth in this Agreement
shall survive the execution and delivery of this Agreement.
13.2 Each party hereto agrees to duly execute and deliver, or cause to be
duly executed and delivered, such further instruments and do and cause
to be done such further acts and things, including, without limitation,
the filing of such additional assignments, agreements,
<PAGE> 10
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 10 Supply Agreement
Peptor Ltd.
documents, and instruments, that may be necessary or as any other party
hereto may at any time and from time to time reasonably request in
connection with this Agreement or to carry out more effectually the
provisions and purposes of, or to better assure and confirm unto such
other party its rights and remedies under, this Agreement.
13.3 The relationship between JV and Peptor under this Agreement is that of
buyer and seller, and nothing contained in this Agreement shall
constitute Peptor the agent or representative of JV for any purpose
whatsoever. In particular, but without derogating from the generality
of the foregoing, Peptor shall have no right to assume or create any
obligation, contract or commitment, expressed or implied, or make any
representation, on behalf, or in the name, of JV, and Peptor shall
indemnify JV and hold JV harmless against and from any liability
arising from any such act by Peptor.
13.4 This Agreement constitutes, on and as of the date hereof, the entire
agreement of the parties with respect to the subject matter hereof, and
all prior or contemporaneous understanding or agreements, whether
written or oral, between the parties with respect to such subject
matter are hereby superseded in their entireties.
13.5 This Agreement may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, taken together, shall
constitute one and the same instrument.
13.6 If any controversy or claim arising out of this Agreement cannot be
settled by the parties, the controversy or claim shall be settled by
arbitration conducted by a single arbitrator, mutually elected by the
parties (or if the parties fail to elect such arbitrator within two (2)
weeks from the date a party hereto notifies the other parties in
writing that it wishes to commence arbitration proceedings, an
arbitrator elected by the American Arbitration Association, in the city
of New York, N.Y., and judgment on the award may be entered in any
court having jurisdiction.
ARTICLE XIV - ASSIGNMENT
The terms and provisions of this Agreement shall inure to the benefit
of, and be binding upon, JV, Peptor, and their respective successors and
authorized assigns; provided, however, that, except as provided herein, no party
may assign or otherwise transfer any of its rights and interests, nor delegate
any of its respective obligations, hereunder, including, without limitation,
pursuant to a merger or consolidation, without the prior written consent of the
other party hereto. Any
<PAGE> 11
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 11 Supply Agreement
Peptor Ltd.
attempt to assign or delegate any portion of this Agreement in violation of this
Article XIV shall be null and void. Subject to the foregoing, any reference to
JV or Peptor hereunder shall be deemed to include the successors thereto and
assigns thereof.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed by its duly authorized representatives on the 1st day
of April, 1996.
NEOPROBE-PEPTOR JV L.L.C. PEPTOR LIMITED
/s/ David C. Bupp /s/ Yoram Karmon
- ----------------------------------------- -------------------------------
David C. Bupp, Member Representative Yoram Karmon, President
<PAGE> 1
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Exhibit 10.3.43
SUPPLY AGREEMENT
This Agreement is made effective as of April 1, 1996 ("Effective
Date"), by and between Neoprobe-Peptor JV L.L.C., a limited liability company of
the State of Delaware, U.S.A. ("JV"), and Neoprobe (Israel) Ltd., an Israeli
limited liability company ("Neoprobe Israel").
RECITALS:
WHEREAS, Peptor, and Neoprobe Corporation, a Delaware, U.S.A.
corporation ("Neoprobe") have agreed to the formation of JV between Neoprobe and
Peptor Corp, a corporation of the State of Delaware, by the concurrent entry
into a Limited Liability Company Agreement between Neoprobe and Peptor Corp.;
WHEREAS, Neoprobe Israel has developed or obtained technology enabling
it to radiolabel proteins of interest to JV;
WHEREAS, Neoprobe Israel is willing to become its exclusive
radiolabeller of proteins for JV; and
WHEREAS, JV is willing to have Neoprobe Israel be its exclusive
radiolabeller of proteins;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, JV and Neoprobe Israel agree as follows:
AGREEMENT:
ARTICLE I. - SUPPLY
1.1 (a) During the Term of this Agreement, Neoprobe Israel agrees
to radiolabel Peptor Proprietary Proteins as defined in the
Limited Liability Company Agreement ("PRODUCT") according to
Specifications And Test Methods set forth in Exhibit A hereto
(hereinafter "SPECIFICATIONS"). During the Term of this
Agreement or any extensions thereof, Neoprobe Israel shall use
reasonable best efforts to meet JV's PRODUCT order and
delivery requirements, as advised from JV from time to time.
(b) During the Term of this Agreement, JV agrees that Neoprobe
Israel will be its exclusive radiolabeller of PRODUCT;
(c) JV and Neoprobe Israel agree that Neoprobe Israel, if it so
determines, may on a contract basis, radiolabel proteins for
itself or for companies other than JV.
<PAGE> 2
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 2 Supply Agreement
Neoprobe (Israel) Ltd.
Notwithstanding the foregoing, Neoprobe Israel, in allocating
its production capacity, shall give priority to the supply
requirements of JV.
(d) The commercial price per vial of the PRODUCT during the Term
hereof shall be *. Neoprobe Israel agrees that the vials of
PRODUCT shall meet the requirements set out in the
SPECIFICATIONS.
(e) "Commercial Sale" for present purposes means the earlier of
the sale of the PRODUCT in the United States has received
approval by the United States Food and PRODUCT Administration
("FDA"), or has received approval by the appropriate
regulatory agency in at least two (2) of the following four
(4) countries: United Kingdom, France, Germany, and Italy
("European Authorities").
1.2 (a) Upon written notice by JV to Neoprobe Israel, Neoprobe
Israel shall at the expense of JV submit an ELA and updated
PRODUCT Master File ("DMF") to the FDA, if required, in
sufficient detail describing the manufacturing of the PRODUCT
and Neoprobe Israel's facilities as may be required for the
"Manufacturing Section" of JV's IND. JV shall advise Neoprobe
Israel, at Neoprobe Israel's request, in matters pertaining to
the content and requirements of the DMF and ELA. Neoprobe
Israel also agrees to supply a copy of sections of their DMF
directly relating to the PRODUCT or any portion thereof to JV
upon JV's request. Neoprobe Israel shall give JV the right to
reference such DMF.
(b) JV shall at its own expense submit and file for corresponding
approval to market the PRODUCT in countries in the TERRITORY.
Neoprobe Israel agrees to supply copies of all papers relating
to this task to JV. Neoprobe Israel shall cooperate with JV in
this task.
1.3 Neoprobe Israel warrants that the PRODUCT:
(i) shall meet the SPECIFICATIONS which include the obligation of
Neoprobe Israel to comply with all applicable Good Laboratory
Practices ("GLP's"), Good Manufacturing Practices ("cGMP's")
and other such applicable regulations of the FDA and European
Authorities;
* Omitted and filed separately under Rule 24b-2 pursuant to which
Neoprobe Corporation has requested Confidential Treatment of this
information.
<PAGE> 3
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 3 Supply Agreement
Neoprobe (Israel) Ltd.
(ii) shall be packaged and shipped to JV or its designee for
distribution and sale in a manner consistent with the
SPECIFICATIONS; and
(iii) shall otherwise comply with the requirements of the FDA and
European Authorities for commercial sale of the PRODUCT.
Neoprobe Israel further warrants that it shall convey good title to all
quantities of PRODUCT supplied hereunder.
1.4 Neoprobe Israel shall test each batch of PRODUCT prior to shipment and
shall retain records (for the period of time required by cGMP
regulations) pertaining to each such test. The tests and analyses to be
conducted shall be specified in Exhibit A hereto and may be changed by
mutual written consent of the parties.
1.5 JV shall have the right, at reasonable times and with reasonable prior
notice, to inspect Neoprobe Israel's production facilities to confirm
Neoprobe Israel's compliance with cGMP's and the SPECIFICATIONS, and to
review the records under this Article, and other testing standards. In
the event that JV observes a condition which causes it to believe that
the PRODUCT is not being manufactured in accordance with cGMP's, the
SPECIFICATIONS, or other testing standards, Neoprobe Israel and JV
shall immediately meet to discuss the concerns and any additions or
modifications to bring the facilities and production procedures into
compliance. The parties agree to use their reasonable efforts to modify
facilities and/or production procedures to bring the manufacture of the
PRODUCT into full compliance based on the parties' understanding of
such regulations. In the event the parties cannot resolve the issue of
compliance, a third party expert, acceptable to both parties and bound
by confidentiality, shall be employed to resolve the issue and the
decision by such third party shall be binding. The cost incurred with
respect to said expert shall be borne by JV.
1.6 At JV's request and with reasonable prior notice to Neoprobe Israel,
Neoprobe Israel agrees to permit the FDA to inspect Neoprobe Israel's
production facilities.
1.7 Neoprobe Israel shall submit, at its expense and with the consent and
cooperation of JV as set forth in this Article, an Establishment
License Application ("ELA"), if required, to manufacture the PRODUCT
commercially. JV shall promptly advise Neoprobe Israel, at Neoprobe
Israel's request, in matters pertaining to U.S. regulatory requirements
relating to the manufacture of the PRODUCT.
<PAGE> 4
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 4 Supply Agreement
Neoprobe (Israel) Ltd.
1.8 Should JV request Neoprobe Israel to provide proof of manufacture of
the PRODUCT to a regulatory authority, Neoprobe Israel agrees to
cooperate and supply information in response to such request. JV agrees
to reimburse any out of pocket expenses to Neoprobe Israel for their
effort.
1.9 With respect to supply of the PRODUCT for use in a European country,
the provisions of this Article I shall be construed to encompass the
various equivalent (or most nearly equivalent) regulatory agencies and
regulations applicable. The parties agree to negotiate in good faith
any modifications to the provisions hereof occasioned by virtue of the
supply of the PRODUCT to a European country.
1.10 JV hereby grants to Neoprobe Israel during the Term hereof a
non-exclusive irrevocable and unconditional option to supply additional
products upon terms and conditions to be mutually agreed upon by the
parties hereto acting in good faith.
ARTICLE II - PAYMENTS
JV agrees to pay all invoices submitted by Neoprobe Israel hereunder
within thirty (30) days thereof.
ARTICLE III - CONFIDENTIALITY
3.1 Both parties to this Agreement agree to maintain any information
received from the other party under this Agreement ("INFORMATION") in
confidence and not disclose the INFORMATION to any person or entity
that is not a party to this Agreement.
3.2 INFORMATION exchanged under this Agreement may be in any form such as
written or oral. Upon termination of the Agreement, if requested by the
disclosing party, the receiving party will return any INFORMATION
received in tangible form together with any copies receiving party may
have made.
3.3 The foregoing obligations shall not apply to INFORMATION which Neoprobe
Israel or JV can demonstrate falls within one of the following
exceptions.
(a) is, or without the fault of the receiving party becomes, available
to the public; or
(b) was known to the receiving party prior to receipt from the
disclosing party; or
(c) was received without restriction from a third party having the
right to make such disclosure.
<PAGE> 5
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 5 Supply Agreement
Neoprobe (Israel) Ltd.
If JV or Neoprobe Israel breach their confidentiality
obligations and the INFORMATION thereby becomes available to the
public, the non-breaching party (either JV or Neoprobe Israel) is not
thereby released from their confidentiality obligations under this
Agreement.
3.4 INFORMATION disclosed to a receiving party in Article 3.1 which is
specific shall not be deemed to be within any of the above exceptions
merely because it is embraced by more general information coming within
one of the exceptions. Any combination of features disclosed to a
Receiving Party shall not be deemed to be within any exception merely
because individual features thereof fall within one of the exceptions.
3.5 A receiving party shall notify the disclosing party promptly in
writing, after receipt thereof, with supporting evidence when any
INFORMATION received is considered by a receiving party to fall within
any of the exceptions of Article 3.3.
3.6 The confidentiality provisions of the Agreement will remain in effect
for five (5) years from the expiration or termination of this
Agreement.
ARTICLE IV - TERM
The Term of this Agreement shall extend for thirty-six (36) months
after Commercial Sales begin. Thereafter, the Term shall automatically be
renewed for like periods of thirty-six (36) months unless JV notifies the
Neoprobe Israel within one (1) year from the end of each thirty-six (36) month
term that the Agreement is to be terminated.
ARTICLE V - TERMINATION
5.1 Should JV terminate this Agreement for whatever reason, Neoprobe Israel
shall be entitled to retain all the payments made to Neoprobe Israel by
JV.
5.2 In any event, any termination of this Agreement shall not relieve JV or
Neoprobe Israel of their respective obligations of confidentiality
under Article III.
ARTICLE VI - FORCE MAJEURE
6.1 Neither party shall be responsible in any way to the other party for
failure to perform any of its obligations under this Agreement when
such failure is due to any war, fire, flood, labor trouble, strike,
natural calamity, accident, riot, act of governmental authority,
inability or economic impracticality to comply with requirements
imposed by
<PAGE> 6
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 6 Supply Agreement
Neoprobe (Israel) Ltd.
environmental regulations or orders, Acts of God, or other
similar contingencies beyond the reasonable control of either party.
6.2 Neoprobe Israel shall not be held liable to JV for default or delay in
the manufacture or delivery of the PRODUCT due to an act of God,
accident, fire, flood, storm, riot, sabotage, explosion, strike, labor
disturbance, national defense requirements, governmental law, ordinance
rule or regulation, whether valid or invalid, inability to obtain
electricity or other types of energy, raw materials, labor, equipment
or transportation, or any similar contingency beyond its reasonable
control whether the contingency is of the same class as those
enumerated above, it being expressly agreed that such enumeration shall
be non-exclusive (each contingency is referred to in this Agreement as
an ("event of force majeure"). Neoprobe Israel shall give JV immediate
notice of any occurrence of any such contingency.
ARTICLE VII - EXPORT CONTROL
7.1 Neoprobe Israel and JV also agree not to disclose any INFORMATION,
except that which becomes generally known to the public under the
exceptions to confidentiality given in Article IV, or to re-export,
either directly or indirectly, any technical data relating to
commodities incorporating INFORMATION or any direct product of the
technical data (the PRODUCT) to Albania, Bulgaria, Cambodia, Cuba,
Czech Republic (former Czechoslovakia), Estonia, Haiti, Iran, Iraq,
Laos, Latvia, Lithuania, Libya, Mongolian People's Republic, North
Korea, People's Republic of China, Poland, Slovak Republic (former
Czechoslovakia), South African military and police, Romania, Syria,
former republics and geographic regions of the Union of Soviet
Socialist Republics, Vietnam, Yugoslavia (Serbia and Montenegro) or any
other country that may in the future be covered by the United States
Export Administration Act of 1979 as amended and the Trading With the
Enemy Act and the regulations of the U.S. Departments of Commerce,
Defense, State, Energy and Treasury pursuant thereto. Neoprobe Israel
and JV also agree that they will not re-export, either directly or
indirectly, such INFORMATION, technical data or direct products (the
PRODUCT) to any country other than those listed in the preceding
sentence without first obtaining a written letter of assurance
equivalent in scope to this paragraph or the appropriate license from
the U.S. government.
<PAGE> 7
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 7 Supply Agreement
Neoprobe (Israel) Ltd.
7.2 With regard to the preceding paragraph, JV shall provide Neoprobe
Israel with notice of any additions or deletions to the above countries
listed and which change would impact this Agreement, with the notice to
be sent as specified in Article XI.
7.3 Neoprobe Israel agrees to use reasonable efforts to comply with this
Article and agrees to indemnify JV for any intentional breach incurred
by Neoprobe Israel's shipment of the PRODUCT, or technical data
relating to commodities incorporating INFORMATION, in contravention of
this Article.
7.4 This Article shall survive any termination of the Agreement.
ARTICLE VIII - CHOICE OF LAW
8.1 The provisions of this Agreement shall be governed and construed under
the laws of the State of Ohio.
8.2 If any provision of this Agreement shall be found or held to be invalid
or unenforceable, the meaning of such provision shall be construed, to
the extent feasible, so as to render the provision enforceable, and if
no feasible interpretation would save such provision, it shall be
severed from the remainder of this Agreement, which shall remain in
full force and effect unless the severed provision is essential and
material to the rights or benefits received by any party hereto. In
such event, the parties shall use their best efforts to negotiate, in
good faith, a substitute, valid, and enforceable provision or agreement
which most nearly effectuates the parties' intent into entering into
this Agreement.
<PAGE> 8
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 8 Supply Agreement
Neoprobe (Israel) Ltd.
ARTICLE IX - INDEMNITIES
9.1 JV shall indemnify Neoprobe Israel for and save Neoprobe Israel
harmless from all losses, costs or damage (including reasonable
attorney fees and expenses) suffered or incurred by Neoprobe Israel in
respect of damage to or destruction of property, personal injury or
death which may be caused by or arise from, either wholly or in part,
from JV's negligence or that of its directors, officers, or employees,
agents, or representatives or those third parties to whom JV directs
Neoprobe Israel to ship the product.
9.2 Neoprobe Israel shall indemnify JV for and save JV harmless from all
losses, costs or damage (including reasonable attorney fees and
expenses) suffered or incurred by JV in respect of damage to or
destruction of property, personal injury or death which may be caused
by or arise from Neoprobe Israel's negligence or that of its directors,
officers, or employees, agents or representatives.
9.3 This Article shall survive any termination of this Agreement.
ARTICLE X - WAIVER
10.1 No failure on the part of any party to exercise and no delay in
exercising any right, power, remedy, or privilege under this Agreement,
or provided by statute or at law or in equity or otherwise, including
without limitation, the right or power to terminate this Agreement,
shall impair, prejudice, or constitute a waiver of any such right,
power, remedy, or privilege, or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single
or partial exercise of any such right, power, remedy, or privilege
preclude any other or further exercise thereof or the exercise of any
other right, power, remedy, or privilege.
10.2 No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure by any party
therefrom, shall in any event be effective unless the same shall be in
writing specifically identifying this Agreement and the provision
intended to be amended, modified, waived, terminated, or discharged and
any such amendment, modification, waiver, termination or discharge
shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of
dealing or performance or any other matter not set forth in an
agreement in writing and signed by both parties hereto.
<PAGE> 9
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 9 Supply Agreement
Neoprobe (Israel) Ltd.
ARTICLE XI - NOTICE
All notices, requests, and other communications to JV or Neoprobe
Israel hereunder shall be in writing (including telecopy or similar electronic
transmissions), shall refer specifically to this Agreement and shall be
personally delivered or sent by telecopy or other electronic facsimile
transmission or by registered mail, or certified mail, return receipt requested,
postage prepaid, in each case to the respective address specified below (or such
other address as may be specified in writing to the other party hereto) or in
the case of a telecopy or other electronic transmission, to such party by means
confirmed in writing or by agreement:
If to JV: with a copy to:
Neoprobe-Peptor JV L.L.C. Peptor Limited
Attention: David C. Bupp Attention: Yoram Karmon
425 Metro Place North Kiryat Weizmann
Suite 400 Rehovot 76326
Dublin, OH 43017-1367 ISRAEL
tel.: 614-793-7500 tel.:
fax: 614-793-7522 fax:
If to Neoprobe Israel: with a copy to:
Neoprobe (Israel) Ltd. J.K. Mueller, Jr., Esq.
Attention: David C. Bupp MUELLER AND SMITH, L.P.A.
425 Metro Place North MUELLER-SMITH BUILDING
Suite 400 7700 Rivers Edge Drive
Dublin, OH 43017-1367 Columbus, Ohio 43235
tel.: 614-793-7500 tel.: 614-436-0600
fax: 614-793-7522 fax: 614-436-0057
Any notice or communication given in conformity with this Article XI shall be
deemed to be effective when received by the addressee, if delivered by hand,
telecopy or other electronic transmission, and seven (7) days after mailing, if
mailed.
ARTICLE XII - HEADINGS
The headings used in this Agreement are inserted for reference and
shall not be deemed as part of the text.
<PAGE> 10
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 10 Supply Agreement
Neoprobe (Israel) Ltd.
ARTICLE XIII - UNDERSTANDING
13.1 This Agreement represents the entire understanding of the parties with
respect to the subject matter hereof. All agreements, covenants,
representations, warranties and indemnities set forth in this Agreement
shall survive the execution and delivery of this Agreement.
13.2 Each party hereto agrees to duly execute and deliver, or cause to be
duly executed and delivered, such further instruments and do and cause
to be done such further acts and things, including, without limitation,
the filing of such additional assignments, agreements, documents, and
instruments, that may be necessary or as any other party hereto may at
any time and from time to time reasonably request in connection with
this Agreement or to carry out more effectually the provisions and
purposes of, or to better assure and confirm unto such other party its
rights and remedies under, this Agreement.
13.3 The relationship between JV and Neoprobe Israel under this Agreement is
that of buyer and seller, and nothing contained in this Agreement shall
constitute Neoprobe Israel the agent or representative of JV for any
purpose whatsoever. In particular, but without derogating from the
generality of the foregoing, Neoprobe Israel shall have no right to
assume or create any obligation, contract or commitment, expressed or
implied, or make any representation, on behalf, or in the name, of JV,
and Neoprobe Israel shall indemnify JV and hold JV harmless against and
from any liability arising from any such act by Neoprobe Israel.
13.4 This Agreement constitutes, on and as of the date hereof, the entire
agreement of the parties with respect to the subject matter hereof, and
all prior or contemporaneous understanding or agreements, whether
written or oral, between the parties with respect to such subject
matter are hereby superseded in their entireties.
13.5 This Agreement may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, taken together, shall
constitute one and the same instrument.
13.6 If any controversy or claim arising out of this Agreement cannot be
settled by the parties, the controversy or claim shall be settled by
arbitration conducted by a single arbitrator, mutually elected by the
parties (or if the parties fail to elect such arbitrator within two (2)
weeks from the date a party hereto notifies the other parties in
writing that it wishes to commence arbitration proceedings, an
arbitrator elected by the American Arbitration
<PAGE> 11
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2.
Neoprobe-Peptor JV L.L.C. Page 11 Supply Agreement
Neoprobe (Israel) Ltd.
Association, in the city of New York, N.Y., and judgment on the award
may be entered in any court having jurisdiction.
ARTICLE XIV - ASSIGNMENT
The terms and provisions of this Agreement shall inure to the benefit
of, and be binding upon, JV, Neoprobe Israel, and their respective successors
and authorized assigns; provided, however, that, except as provided herein, no
party may assign or otherwise transfer any of its rights and interests, nor
delegate any of its respective obligations, hereunder, including, without
limitation, pursuant to a merger or consolidation, without the prior written
consent of the other party hereto. Any attempt to assign or delegate any portion
of this Agreement in violation of this Article XIV shall be null and void.
Subject to the foregoing, any reference to JV or Neoprobe Israel hereunder shall
be deemed to include the successors thereto and assigns thereof.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed by its duly authorized representatives on the 1st day
of April, 1996.
NEOPROBE-PEPTOR JV L.L.C. NEOPROBE (ISRAEL) LTD.
s/Yoram Karmon s/David C. Bupp
- ------------------------------------ --------------------------------
Yoram Karmon, Member Representative David C. Bupp, President
<PAGE> 1
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Exhibit 10.3.44
TECHNOLOGY OPTION AGREEMENT
This Agreement is made and entered into as of this 14th day of March,
1996, by and between Cira Technologies, Inc., a Delaware corporation having a
principal place of business at Columbus, Ohio (hereinafter referred to as "Cira"
or "Licensor"), and Neoprobe Corporation, a Delaware Corporation having a
principal place of business at Dublin, Ohio (hereinafter referred to as
"Neoprobe" or "Licensee").
RECITALS:
WHEREAS, Cira desires to grant an option to Neoprobe to exclusively
license Cira's cell processing technology, including, the data, discoveries,
inventions, and other new technology developed by Cira for the treatment of *
infected human patients involving the mitogenic stimulation of
cytokine-secreting cells derived from lymph nodes excised from infected human
patients for preparation of a therapeutic agent which then is administered to
the infected human patients, and data, know-how, processes, and procedures
connected therewith (hereinafter, "Primary Technology");
WHEREAS, Cira further desires to grant an option to Neoprobe to
exclusively license Cira's cell processing technology, including, the data,
discoveries, inventions, and other new technology developed by Cira for the
treatment of chronic infectious and/or autoimmune disease in humans involving
the mitogenic stimulation of cytokine-secreting cells derived from lymph nodes
excised from chronically-infected and/or autoimmune disease afflicted human
patients (excluding Primary Technology) for preparation of a therapeutic agent
which then is administered to the infected human patients, and data, know-how,
processes, and procedures connected therewith (hereinafter "Secondary
Technology"); and
WHEREAS, Neoprobe desires to accept said grants of options to license
from Cira the Primary Technology and Secondary Technology on an exclusive basis
to enable Neoprobe to develop and market products involving employment of the
Primary Technology and Secondary Technology.
NOW, THEREFORE, the parties hereto, in consideration of the promises,
terms and conditions set forth herein, mutually agree as follows:
ARTICLE I - CLINICAL STUDY
1.1 Clinical Study - Neoprobe agrees to and will provide financial,
clinical, and technical support to Cira for Cira to conduct a Phase I
clinical study of the Primary Technology. Such Phase I clinical study
will not exceed forty (40) patients and Neoprobe's financial commitment
for such Phase I clinical study will not exceed Five Hundred Thousand
- --------
(*) Omitted and filed separately under Rule 24b-2 pursuant to which Neoprobe
Corporation has requested confidential treatment of this information.
<PAGE> 2
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Technology Option Agreement Page 2 Cira Technologies & Neoprobe Corp.
Dollars ($500,000). Such Phase I clinical study will commence within
one hundred twenty (120) days after the effective date of this
Agreement. Such Phase I clinical study will be conducted under a
physician's IND sponsored by Cira. Such Phase I clinical study will be
completed within twenty-one (21) years from its commencement.
1.2 Supervision - Neoprobe and Cira will design and manage the Phase I
clinical study to be conducted at The Ohio State University and at
other institutions mutually agreed to by the parties. Cira will analyze
the clinical data derived from the Phase I clinical study and provide
copies of all clinical information and data summaries to Neoprobe. Cira
will provide Neoprobe with interim clinical information upon treatment
of each ten (10) patient cohort using the Primary Technology. Neoprobe
has the right to terminate this Agreement and its financial obligation
to fund the Phase I clinical study if Neoprobe, in its sole discretion,
is dissatisfied with interim clinical results from the Phase I clinical
study.
ARTICLE II - GRANTS
2.1 Grant of Option
(a) - Cira hereby grants to Neoprobe an exclusive option to an
exclusive, world-wide license, with the right to grant sublicenses with
the prior written reasonable consent of Cira, to make, have made, sell,
have sold, and use the Primary Technology for research and commercial
purposes, and to sublicense others to do so, subject to (i) a
reservation of rights for Cira to use the Primary Technology in its own
research activities; and (ii) the other terms and conditions of this
Agreement.
(b) - Subject to Neoprobe's exercise of the option granted it under
Article 2.1 (a), Cira hereby grants to Neoprobe an exclusive option to
an exclusive, world-wide license, with the right to grant sublicenses
with the prior written reasonable consent of Cira, to make, have made,
sell, have sold, and use the Secondary Technology for research and
commercial purposes, and to sublicense others to do so, subject to (i)
a reservation of rights for Cira to use the Secondary Technology in its
own research activities; and (ii) the other terms and conditions of
this Agreement.
(c) - For purposes of this Agreement, Primary Technology and Secondary
Technology include all technology owned, acquired, licensed, or which
Cira otherwise has rights to, including subsequent inventions, if any,
made by Cira to the Primary Technology or to the Secondary Technology.
The parties expressly agree, however, that Primary Technology and
Secondary Technology apply to humans only and exclude veterinary uses.
2.2 Patents
(a) - Cira shall, at Cira's expense, prosecute and maintain patent
applications and patents covering the Primary Technology for the United
States. Neoprobe shall, at Neoprobe's expense, but in the name of Cira,
prosecute and maintain patent applications and patents covering the
Primary Technology outside of the United States.
<PAGE> 3
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Technology Option Agreement Page 3 Cira Technologies & Neoprobe Corp.
(b) - Cira also shall, at Cira's expense, prosecute and maintain patent
applications and patents covering the Secondary Technology for the
United States, if Cira determines that patentable subject matter is
present in its Secondary Technology. Neoprobe shall, at Neoprobe's
expense, but in the name of Cira, prosecute and maintain patent
applications and patents covering the Secondary Technology outside of
the United States.
2.3 Warranties - Cira hereby warrants that it is an owner of the right,
title, and interest in and to the Primary Technology and the Secondary
Technology, and that it has the right to grant the above exclusive
option to license, under patent rights as provided herein. HOWEVER,
CIRA EXCLUDES ALL WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR PARTICULAR PURPOSE AND FREEDOM FROM INFRINGEMENT OF RIGHTS
OF OTHERS, AS TO THE PRIMARY TECHNOLOGY AND THE SECONDARY TECHNOLOGY OR
ANY PRODUCT OR ANY SERVICE DERIVED THEREFROM. Cira agrees to hold
Neoprobe harmless and defend it against all claims and suits relating
to the warranty given to Neoprobe under this subparagraph.
2.4 Acceptance of Option and License
(a) - Neoprobe accepts the above exclusive option to license under
Article 2.1 (a) in accordance with the terms and conditions set forth
herein. The form of License Agreement therefor is attached hereto with
royalty rate blank to be mutually agreed upon between the parties.
(b) - Neoprobe accepts the above exclusive option to license under
Article 2.1 (b) in accordance with the terms and conditions set forth
herein. The license agreement between the parties shall be in form and
substance (with royalty rate and performance minimums to be negotiated)
like that between the parties with respect to the Primary Technology.
ARTICLE III - TIME
3.1 Time to Exercise Option
(a)- The exclusive option granted by Cira to Neoprobe under Article 2.1
(a) shall expire one hundred twenty (120) days following the closing of
the Phase I clinical study conducted under Article I. Neoprobe may
exercise its exclusive option granted it under Article 2.1 (a) at any
time prior to the expiration of the exclusive option pursuant to the
terms of this Article 3.1.
(b) - The exclusive option granted by Cira to Neoprobe under Article
2.1 (b) shall expire upon initiation of a Phase III clinical study of
treatment of human patients using Primary Technology, or three (3)
years after execution of the license agreement for the Primary
Technology. Neoprobe may exercise its exclusive option granted it under
Article 2.1 (b) at any time prior to the expiration of the exclusive
option pursuant to the terms of this Article 3.1, provided that it
first has exercised its option under Article 2.1 (a)
3.2 Manner of Exercise - Neoprobe shall exercise one or both of the
exclusive options granted it hereunder and indicate its acceptance of
an exclusive license to the Technology by
<PAGE> 4
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Technology Option Agreement Page 4 Cira Technologies & Neoprobe Corp.
giving notice to Cira pursuant to Article 5.4 of this Agreement. If
Neoprobe does not exercise the exclusive option granted it hereunder,
this Agreement will expire and Cira will be free to exploit the Primary
Technology and the Secondary Technology in any manner that it chooses.
ARTICLE IV - FORCE MAJEURE
4.1 No party shall incur any liability, consequential or otherwise, for any
delay in performance or failure to perform its obligations under this
Agreement, due to acts of God or public enemies, acts of other parties,
requests or regulations of civil or military authority, labor disputes,
accidents at the factory, lockouts, fire, riots, war or other outbreaks
or hostilities, embargoes, inability to obtain shipping or raw
material, delays of carriers or suppliers, machinery breakdowns,
epidemics, floods, unusually severe weather, shortage of power or fuel,
or any causes whatsoever beyond the reasonable control of the party in
question.
ARTICLE V - MISCELLANEOUS
5.1 Non-Waiver - The waiver by either party of a breach of any provision of
this Agreement shall not be deemed to effect or imply a waiver of any
other breach of such provision or a waiver of the provision itself.
5.2 Governing Law - This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
5.3 Assignment - This Agreement shall be assignable by Neoprobe only to an
entity created by Neoprobe to fund research and development of the
Technology provided that Neoprobe retains an option from such entity to
commercialize the Technology; provided further that Cira shall have the
right to approve of such assignment by Neoprobe, which approval shall
not be unreasonably withheld.
5.4 Notices - Any notice, request or payment which may or must be given
under this Agreement shall be in writing and sent to the other party at
its address indicated below or to such other address as the addressee
shall have theretofore furnished in writing to the addressor.
IF TO CIRA TECHNOLOGIES, INC.: WITH A COPY TO:
CIRA TECHNOLOGIES, INC. J.K. Mueller, Jr.
MUELLER-SMITH BUILDING MUELLER AND SMITH, L.P.A.
7700 Rivers Edge Drive MUELLER-SMITH BUILDING
Columbus, OH 43235-1355 7700 Rivers Edge Drive
Columbus, OH 43235-1355
IF TO NEOPROBE CORPORATION: WITH A COPY TO:
<PAGE> 5
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
Technology Option Agreement Page 5 Cira Technologies & Neoprobe Corp.
David C. Bupp, President Robert S. Schwartz., Esq.
NEOPROBE CORPORATION SCHWARTZ, WARREN & RAMIREZ
425 Metro Place North, Suite 400 41 South High Street
Dublin, Ohio 43017 Columbus, Ohio 43215
5.5 Entire Agreement - The terms and provisions contained in this Agreement
constitute the entire Agreement between the parties and shall supersede
all previous communications, representations, agreements or
understandings, either oral or written, between the parties hereto with
respect to the subject matter hereof, and no agreement or understanding
varying or extending this Agreement will be binding upon either party
hereto, unless in writing which specifically refers to this Agreement,
signed by duly authorized officers or representatives of the respective
parties, and the provisions of this Agreement not specifically amended
thereby shall remain in full force and effect according to their terms.
5.6 Severability - The invalidity or illegality of any term, clause or
provision of this Agreement shall not invalidate or lessen the effect
of any other term, clause or provision of this Agreement or of this
Agreement itself, unless a party would thereby be substantially
deprived of its benefit from the Agreement, in which event the parties
will attempt in good faith to revise the Agreement on a fair and
equitable basis, but if such attempt fails, then the Agreement may be
terminated by either party upon thirty (30) days' written notice to the
other.
5.8 Confidence - Cira and Neoprobe each agree to maintain the terms of this
Agreement in confidence, unless this Agreement permits its disclosure
or a governmental regulation or law requires its disclosure; however,
each party may disclose the existence of this Agreement. Notice of any
disclosure made by any party to a non-party shall promptly be given to
the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers on the date
first above written.
NEOPROBE CORPORATION CIRA TECHNOLOGIES, INC.
By: s/David C. Bupp By: s/ Richard G. Olsen
---------------------------------- ---------------------------
Typed Name: David C. Bupp Typed Name: Richard G. Olsen
Title: President Title: President Title: President
Date: March 14, 1996 Date: May 21, 1996
<PAGE> 6
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
LICENSE AGREEMENT
This Agreement is made and entered into as of this ___ day of ____,
199__, by and between Cira Technologies, Inc., a Delaware corporation having a
principal place of business at Columbus, Ohio (hereinafter referred to as "Cira"
or "Licensor"), and Neoprobe Corporation, a Delaware Corporation having a
principal place of business at Dublin, Ohio (hereinafter referred to as
"Neoprobe" or "Licensee").
RECITALS:
WHEREAS, in a Technology Option Agreement Cira granted an option to
Neoprobe to exclusively license Cira's cell processing technology, including,
the data, discoveries, inventions, and other new technology developed by Cira
for the treatment of * infected human patients involving the mitogenic
stimulation of cytokine-secreting cells derived from lymph nodes excised from
infected human patients for preparation of a therapeutic agent which then is
administered to the infected human patients, and data, know-how, processes, and
procedures connected therewith (hereinafter, "Primary Technology");
WHEREAS, the Primary Technology was developed by Drs. Olsen and
Ridihalgh under the auspices of Cira, and is described in U.S. Pat. Application
Serial No. 08/604,728 filed Feburary 21, 1996 (the "Patent Application");and
WHEREAS, this License Agreement is an attachment to and a part of said
Technology Option Agreement;
NOW, THEREFORE, the parties hereto, in consideration of the promises,
terms and conditions set forth herein, mutually agree as follows:
AGREEMENT:
ARTICLE I - DEFINITIONS
The following terms shall have the meanings set forth below:
1.1 "Primary Technology", is defined in the first recital above.
1.2 "Field" shall mean use of the Primary Technology to treat infected
human patients, such as disclosed in the Patent Application.
1.3 "Licensed Service" shall mean a cell processing method based on the
Primary Technology wherein lymph nodes excised from infected human
patients are mitogenically stimulated for preparation of a therapeutic
agent.
- --------
(*) Omitted and filed separately under Rule 24b-2 pursuant to which Neoprobe
Corporation has requested Confidential Treatment of this information.
<PAGE> 7
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
License Agreement Page 2 Cira Technologies & Neoprobe Corp.
1.4 "Licensed Product(s)" shall mean a therapeutic preparation manufactured
in accordance with the Licensed Service having an approved label
indication by the U.S. Food and Drug Administration for use in treating
infected human patients.
1.5 "Net Product Sales" shall mean the gross amounts received for sale or
lease of Licensed Products or Licensed Service, excluding any
insurance, tax, duty and transportation costs separately invoiced to
customers, and less any broker's commissions actually paid and any
trade, cash and quantity discounts, returns, allowances and adjustments
actually granted to customers out of such gross amounts. However, Net
Product Sales shall not include sales of units of Licensed Products for
which there is reasonable assurance that such units will not be used in
the performance of the Primary Technology, the burden being on Neoprobe
to establish that such assurance existed with regard to any particular
units of Licensed Products, but there will be a rebuttable presumption
of assurance that any unit of Licensed Product will not be used by a
recipient for any purpose that is unlawful under any applicable health
or safety law or regulation in view of its labeling.
1.6 "Affiliate" shall mean a person, whether an individual or a legal
entity, that controls, is controlled by or is under common control with
the antecedent person, where control of a legal entity means the
ability to elect at least one-half of the directors of such entity.
ARTICLE II - LICENSE GRANT, WARRANTY, ACCEPTANCE AND PERFORMANCE
2.1 Grant of License by Cira
2.1.1 - Cira hereby grants to Neoprobe an exclusive, world-wide
license, with the right to grant sublicenses, to make, have made, sell,
have sold, and use the Primary Technology in the Field for research and
commercial purposes, and to sublicense others to do so, subject to (i)
a reservation of rights for Cira to use the PrimaryTechnology in the
Field in its own research activities; and (ii) the other terms and
conditions of this Agreement.
2.1.2 - Subsequent inventions, if any, made by Cira to the Primary
Technology in the Field shall automatically be added to this Agreement.
2.1.3 - Any invention in the Field made by Neoprobe based on the
Primary Technology also shall be automatically added to this Agreement
and a royalty paid on Licensed Products and Licensed Services
thereunder; provided, however, that only one license fee is due for any
Licensed Product or Licensed Service hereunder.
2.2 Warranties - Cira hereby warrants that it is an owner of the right,
title, and interest in and to the Primary Technology, and that it has
the right to grant the above exclusive license, under patent rights as
provided herein. HOWEVER, CIRA EXCLUDES ALL WARRANTIES, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE AND
FREEDOM FROM INFRINGEMENT OF RIGHTS OF OTHERS, AS TO THE PRIMARY
TECHNOLOGY OR ANY LICENSED PRODUCT OR ANY LICENSED SERVICE. Cira agrees
to hold Neoprobe harmless and defend it
<PAGE> 8
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
License Agreement Page 3 Cira Technologies & Neoprobe Corp.
against all claims and suits relating to the warranty given to Neoprobe
under this subparagraph.
2.3 Acceptance of License - Neoprobe accepts the above license, and will
diligently exert its good faith efforts to develop and promote the most
extensive provision of sales of Licensed Products and Licensed Services
under the license that is both commercially practicable and compatible
with good practice in the pharmaceutical industry.
2.4 Forbearance to file Suit - Cira agrees that it will not file suit
against Neoprobe, its affiliates, or sublicensees for activities within
the scope of such entities license or sublicense under this Agreement
based on any of Cira's pre-existing patents or patent applications that
may dominate the Primary Technology, so long as this Agreement and such
license or sublicense remains in effect.
ARTICLE III - ROYALTIES, REPORTS, AND RECORDS
3.1 Royalties
3.11 - Subject to the provisions of Article 6.1 below, Neoprobe shall
pay Cira a royalty (between 3% and 10%) of ___ percent (__%) of Net
Product Sales of Neoprobe and its Affiliates to non-Affiliates for
resale and not for use by or on behalf of the purchaser. Royalty
payments shall be made calendar quarterly by Neoprobe to Cira.
3.1.2 - Subject to the provisions of Article 6.1 below, the parties
hereto agree to split equally all royalties and license fees collected
by Neoprobe for sublicenses that it grants hereunder; provided, that
Neoprobe first shall collect two dollars for each dollar that is spends
on clinical research pursuant to the Option Agreement.
3.2 Minimum Performance by Neoprobe - [To be agreed upon by the parties.]
3.3 Reports - A report shall accompany each royalty payment from Neoprobe
to Cira for each calendar quarter showing the basis upon which the
amount of royalties owed was determined. The first such report, and
payment, shall be made within ninety (90) days after the first
commercial sale of Licensed Product or Licensed Service.
3.4 Records - Neoprobe shall keep accurate records in sufficient detail to
enable the royalties accrued and payable under this Agreement to be
determined. Such records shall be retained for at least three (3) years
after the report required pursuant to Article 3.2 above, for the period
to which such records pertain, has been submitted to Cira, or for such
longer time as may be required to finally resolve any question or
discrepancy raised by Cira. Upon the request, with reasonable notice,
of Cira, but not more frequently than once a calendar year, Neoprobe
shall permit an independent public accountant selected and paid by Cira
and reasonably acceptable to Neoprobe to have access during regular
business hours to such records as may be necessary to verify the
accuracy of royalty payments made or payable hereunder. Said accountant
shall disclose information so
<PAGE> 9
Omitted portions of this Exhibit are subject to a Request for
Confidential Treatment under Rule 24b-2.
License Agreement Page 4 Cira Technologies & Neoprobe Corp.
acquired to Cira only to the extent that it should properly have been
contained in the royalty reports required under this Agreement or
constitutes evidence of fraud upon Cira.
ARTICLE IV-PATENTS, COSTS, AND ENFORCEMENT
4.1 Patents - Cira shall, at Cira's expense, prosecute and maintain patent
applications and patents covering the Primary Technology for the United
States. Neoprobe shall, at Neoprobe's expense, but in the name of Cira,
prosecute and maintain patent applications and patents covering the
Primary Technology outside of the United States.
4.2 Patent Expenses - If Neoprobe decides at any time not to undertake or
continue incurring patenting expenses for any particular patent(s) or
application(s) covering the Primary Technology in or for any
jurisdiction, it shall notify Cira in writing ninety (90) days before
such patent(s) or patent application(s) will lapse or become abandoned
or reasonably timely before the time for filing such application(s)
will expire. In such event, Cira shall have the right to assume filing,
prosecution, and maintenance of such application(s) or patent(s) at its
own expense and to terminate Neoprobe's license with respect thereto.
4.3 Patent Enforcement - Neoprobe shall have the right, but not the
obligation, to initiate and bring suit against any infringer of any
patents and/or patent applications licensed to it hereunder, insofar as
such patents and/or applications cover the Primary Technology. Cira
will, upon request of Neoprobe and at Neoprobe's expense, provide
reasonable assistance in any such suit. If any such suit is brought by
Neoprobe against an infringer, Neoprobe shall be relieved of its
obligation to pay royalties under Article 3.1.1 to Cira to the extent
of fifty percent (50%) of such royalties otherwise first becoming
payable to Cira during such prosecution. The withheld portion of
royalties shall be placed by Neoprobe into an escrow account which may
be used for the sole purpose of reimbursing Neoprobe for not more than
one-half (1/2) of out-of-pocket costs which it incurs in prosecuting
such suit. At the termination of such suit, Neoprobe shall pay to Cira
all royalties so withheld except for any portion thereof that is not
greater than one-half (1/2) of Neoprobe's actual and reasonable
litigation costs not recovered from the infringer. Furthermore, the
amount of any recovery, whether by settlement or judgment and including
the fair value of any payment, thing, right or forbearance received by
or on behalf of Neoprobe, in excess of Neoprobe's actual and reasonable
litigation costs shall be deemed to be Net Sales of Licensed Product
under Article 3.1.1 for the period or periods in which such excess
recovery is realized. Each party bears the obligation of informing the
other of any actual or potential infringement of which it becomes
aware.
ARTICLE V - FORCE MAJEURE
No party shall incur any liability, consequential or otherwise, for any
delay in performance or failure to perform its obligations under this Agreement,
due to acts of God or public enemies, acts of other parties, requests or
regulations of civil or military authority, labor disputes, accidents at the
factory, lockouts, fire, riots, war or other outbreaks or hostilities,
embargoes, inability to obtain shipping or raw material, delays of carriers or
suppliers, machinery breakdowns, epidemics,
<PAGE> 10
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
License Agreement Page 5 Cira Technologies & Neoprobe Corp.
floods, unusually severe weather, shortage of power or fuel, or any
causes whatsoever beyond the reasonable control of the party in
question.
ARTICLE VI - DURATION AND TERMINATION
6.1 Duration - This Agreement shall become effective as of the date first
written above and shall expire upon the expiration, cancellation, or
final and unappealable determination of invalidity or unenforceability
of all patents, and the abandonment of all patent applications,
licensed hereunder to Neoprobe by Cira. However, no royalties shall
accrue hereunder in respect of sales of Licensed Product or Licensed
Service for use, either directly or after resale, in the U.S after the
expiration, cancellation or final and unappealable determination of
invalidity or unenforceability of all issued U.S. patents licensed
hereunder.
6.2 Termination - Either party may terminate this Agreement should the
other party fail to comply with or to perform any of their duties or
other material obligations under this Agreement when due and should
such failure not be remedied within sixty (60) days of written notice
of such default having been given to the defaulting party. Any
termination pursuant to this Article 6.2 shall be in addition to, and
not in place of, other rights or remedies to which a party may be
entitled, including without limitation those under Article 4.2 above.
Any notices must be given to all other parties in accordance with
Article 7.4.
6.3 Existing Rights - The rights of each party against the other which may
have accrued up to the date of termination or expiration shall remain
unaffected by expiration or termination as provided herein.
ARTICLE VII - MISCELLANEOUS
7.1 Non-Waiver - The waiver by either party of a breach of any provision of
this Agreement shall not be deemed to effect or imply a waiver of any
other breach of such provision or a waiver of the provision itself.
7.2 Governing Law - This Agreement shall be governed by and construed in
accordance with the law of the State of Ohio.
7.3 Assignment - This Agreement shall be assignable by Neoprobe only to an
entity created by Neoprobe to fund research and development of the
Primary Technology provided that Neoprobe retains an option from such
entity to commercialize the Primary Technology; provided that Neoprobe
and Cira shall have the right to approve of such assignment by
Neoprobe, which approval shall not be unreasonably withheld.
<PAGE> 11
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
License Agreement Page 6 Cira Technologies & Neoprobe Corp.
7.4 Notices - Any notice, request or payment which may or must be given
under this Agreement shall be in writing and sent to the other party at
its address indicated below or to such other address as the addressee
shall have theretofore furnished in writing to the addressor.
IF TO CIRA TECHNOLOGIES, INC.: WITH A COPY TO:
CIRA TECHNOLOGIES, INC. J.K. Mueller, Jr.
MUELLER-SMITH BUILDING MUELLER AND SMITH, L.P.A.
7700 Rivers Edge Drive MUELLER-SMITH BUILDING
Columbus, OH 43235-1355 7700 Rivers Edge Drive
Columbus, OH 43235-1355
IF TO NEOPROBE CORPORATION: WITH A COPY TO:
David C. Bupp, President Robert S. Schwartz., Esq.
Neoprobe Corporation SCHWARTZ, WARREN & RAMIREZ
425 Metro Place North HUNTINGTON CENTER
Suite 400 41 South High Street
Dublin, Ohio 43017 Columbus, Ohio 43215
7.5 Entire Agreement - The terms and provisions contained in this Agreement
constitute the entire Agreement between the parties and shall supersede
all previous communications, representations, agreements or
understandings, either oral or written, between the parties hereto with
respect to the subject matter hereof, and no agreement or understanding
varying or extending this Agreement will be binding upon either party
hereto, unless in writing which specifically refers to this Agreement,
signed by duly authorized officers or representatives of the respective
parties, and the provisions of this Agreement not specifically amended
thereby shall remain in full force and effect according to their terms.
7.6 Severability - The invalidity or illegality of any term, clause or
provision of this Agreement shall not invalidate or lessen the effect
of any other term, clause or provision of this Agreement or of this
Agreement itself, unless a party would thereby be substantially
deprived of its benefit from the Agreement, in which event the parties
will attempt in good faith to revise the Agreement on a fair and
equitable basis, but if such attempt fails, then the Agreement may be
terminated by either party upon thirty (30) days' written notice to the
other.
7.7 Indemnification - Neoprobe agrees to indemnify, hold harmless and
defend Cira, its officers, employees, and agents, against any and all
claims, suits, losses, damage, costs, fees, and expenses resulting from
or arising out of Neoprobe's use of Primary Technology in connection
with this license.
<PAGE> 12
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
License Agreement Page 7 Cira Technologies & Neoprobe Corp.
7.8 Confidence - Cira and Neoprobe each agree to maintain the terms of this
Agreement in confidence, unless this Agreement permits its disclosure
or a governmental regulation or law requires its disclosure; however,
each party may disclose the existence of this Agreement. Notice of any
disclosure made by any party to a non-party shall promptly be given to
the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers on the date
first above written.
NEOPROBE CORPORATION CIRA TECHNOLOGIES, INC.
NOT FOR SIGNATURE NOT FOR SIGNATURE
By: ____________________________________By: ____________________________________
Typed Name: David C. Bupp Typed Name: Richard G. Olsen
Title: President Title: President
Date: __________________________________Date: __________________________________
<PAGE> 1
Exhibit 10.3.45
LICENSE
This License ("LICENSE"), made effective as of the date of last
signature below ("Effective Date"), is by and between The Dow Chemical Company,
a Delaware corporation ("DOW"), and Neoprobe Corporation, a Delaware Corporation
("NEOPROBE").
RECITALS:
WHEREAS, DOW and NEOPROBE have entered into a Technology Transfer
Agreement, effective as of July 29,1992, ("TTA") and under the terms of Article
1.3(b) thereof NEOPROBE is entitled to a license of DOW's successor antibodies
to ANTIBODIES; and
WHEREAS, NEOPROBE exercised its rights to that license by a request for
the license to DOW in a timely manner; and
WHEREAS, NEOPROBE and DOW agree that this LICENSE is in accord with the
TTA; and
WHEREAS, NEOPROBE and DOW also have an ADDENDUM to the TTA, effective
July 29,1992, an AMENDMENT EXTENSION of the TTA, effective January 1,1995, and a
SECOND AMENDMENT to the TTA, effective April 15,1996; and
WHEREAS, NEOPROBE and DOW have a License for the I2 technology under
the terms of Articles 2.6 and 3.4(c) of the TTA, effective October 10,1995.
NOW, THEREFORE, in consideration of the above premises under the TTA,
and of the mutual promises and covenants herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. All terms in this LICENSE are defined as in the TTA and its
ADDENDUM, AMENDMENT EXTENSION and SECOND AMENDMENT, unless specifically
otherwise stated herein.
1.2 "TERRITORY" as used herein means the world.
1.3 "SUCCESSOR ANTIBODIES" means antibodies modified from or derived
from ANTIBODIES made by either Dr. Jeffrey Schlom and his associates at the
Laboratory of Tumor Immunology and Biology, National Cancer Institute, National
Institutes of Health and/or DOW under a CRADA, and its amendments, between
NIH/NCI and DOW, during the term of that CRADA, and further described as:
(1) monoclonal antibodies COL-1 through 15 which are directed against
various restricted epitopes of the 180,000 dalton carcinoembryonic antigen
complex; and
(2) some forty (40) monoclonal antibodies directed against the purified
TAG-72 antigen and designated CC1 through 92, including CC49; and intended as
possible replacements for ANTIBODIES in the FIELD.
-1-
<PAGE> 2
1.4 "RADIOLABELLED SUCCESSOR ANTIBODY" as used herein means a SUCCESSOR
ANTIBODY labelled with a radionuclide which is suitable for use in the FIELD
particularly as described in DOW's and/or NIH's PATENTS and related know-how.
1.5 "PATENTS" as used herein means all patent applications and patents,
together with any continuations, divisions, reissues and extensions of the
foregoing which claims cover the PRODUCT, use or sale of SUCCESSOR ANTIBODY or
PRODUCT in the FIELD in the TERRITORY which are owned, licensed or controlled by
DOW on the Effective Date, and are listed in APPENDIX A, attached hereto and
made a part hereof. APPENDIX A shall be amended from time to time, at NEOPROBE's
request, but no more frequently than once yearly, unless required to provide
information to compute the payments due under this LICENSE.
1.6 "PRODUCT" as used herein means a finished, packaged, product
suitable for shipment and use in the FIELD, containing a 125I. RADIOLABELLED
SUCCESSOR ANTIBODY.
1.7 "NON-RADIOLABELLED PRODUCT" as used herein means a SUCCESSOR
ANTIBODY antibody suitable for being radiolabelled with 125I.
ARTICLE II
OBLIGATIONS OF DOW
2.1 Grant of SUCCESSOR ANTIBODY Technology: DOW hereby grants to
NEOPROBE, which hereby accepts, an exclusive license in the TERRITORY in the
FIELD for use of the SUCCESSOR ANTIBODY technology, including but not limited to
PATENTS, for the iodination of SUCCESSOR ANTIBODY to prepare PRODUCT or
RADIOLABELLED SUCCESSOR ANTIBODY. NEOPROBE is also granted the RIGHT TO
sublicense the PATENTS and related know-how.
2.2 Transfer of DOW SUCCESSOR ANTIBODY Technology: Neoprobe hereby
acknowledges that it has received technology pursuant to this LICENSE, under the
confidentiality of the TTA and its various amendments, that NEOPROBE has
conducted its due diligence of the PATENTS and has no additional issues with
regard to PATENTS. DOW shall make available five (5) work days between the
Effective Date and December 1, 1996 to answer any questions regarding know-how
on SUCCESSOR ANTIBODIES. After December 1, 1996, no further obligation by DOW to
NEOPROBE for such transfer shall exist. Samples of SUCCESSOR ANTIBODIES shall be
on a basis that they are not available to NEOPROBE via ATCC deposits and that
DOW has such samples available.
2.3 DOW to Maintain PATENTS: DOW shall be responsible at its own cost
and expense for prosecuting the PATENTS and for maintaining and extending the
PATENTS. DOW shall use good faith efforts to prosecute, issue and maintain all
patents in APPENDIX A. DOW shall promptly advise NEOPROBE of the grant, lapse,
nullification, revocation, surrender, invalidation or abandonment of any of the
PATENTS. DOW shall provide NEOPROBE with a copy of issued PATENTS where the text
is in English and of all claims as finally granted in English of PATENTS issued
in a language other than English.
2.3 Patent Term Extension/Restoration: Although DOW shall be
responsible for extension or restoration of PATENTS, NEOPROBE agrees to provide
DOW with reasonably requested records, information and assistance to achieve the
extension or restoration of any PATENTS.
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<PAGE> 3
2.4 Validity, Non-Infringement: DOW DOES NOT WARRANT that the
manufacture, use and sale of the PRODUCT does not fall within the scope of third
party patents or the industrial property rights of a third party.
2.5 Disclaimer of Warranties as to PATENTS: DOW makes no representation
that the inventions covered in any PATENTS are patentable or that the PATENTS
are or will be valid or enforceable, nor does DOW warrant or represent that the
exercise of the rights licensed hereunder is free of infringement of patent
rights of third parties. Should any infringement or damages be alleged, suit
brought or damages collected therefor, no damages are permitted to be collected
from DOW.
2.6 Infringement: If a claim is brought by a third party that
manufacture, use or the sale of PRODUCT in the TERRITORY (regardless of use)
infringes a patent of such third party, NEOPROBE will give prompt written notice
to DOW of such claim if it concerns a PATENT. DOW shall have the sole discretion
and right to seek to dispose of said claim or to conduct the defense of any suit
resulting from such claim if outside the FIELD in the TERRITORY. NEOPROBE at its
option and expense may participate in any suit resulting from such claim that
directly affects its market in the FIELD in the TERRITORY.
2.7 Enforcement:
(a) By DOW - DOW, at its sole discretion, may take action on
its own behalf and expense to institute any action or proceeding by reason of
infringement of any of the PATENTS. If either Party learns of any infringement
of a PATENT, it shall promptly notify the other Party.
DOW shall have the first right, at its own expense, to prosecute all litigation
against a third party infringer who may be infringing a PATENT. NEOPROBE shall
provide all reasonable cooperation, including any necessary use of its name,
required to prosecute such litigation. NEOPROBE shall be consulted concerning
the litigation. DOW will bear the costs and shall be entitled to any recovery
obtained from such litigation, settlement or compromise thereof.
(b) By NEOPROBE - If DOW does not prosecute such infringer or
otherwise abate such infringement (which infringement must be of commercial
significance to NEOPROBE in DOW's reasonable business opinion) within ninety
(90) days after giving or receiving notification of such infringement in the
TERRITORY, unless an extension of the term is mutually agreed upon by the
Parties, then, NEOPROBE shall have the right to prosecute such infringer at its
own expense in the FIELD in the TERRITORY and shall be entitled to retain any
recovery obtained from such litigation, settlement or compromise thereof.
NEOPROBE's cost of litigation in any quarter may be credited against up to fifty
(50%) percent of the royalties due to DOW under Article 3 in the following
quarter.
(c) By neither NEOPROBE or DOW - If DOW decides, after
consulting with NEOPROBE, that neither DOW nor NEOPROBE will defend the PATENT
in the FIELD in the particular country in the TERRITORY, then the royalty for
that PATENT in that country becomes zero (0%) percent upon that decision date.
2.8 Invalidity - In the event that a PATENT in the TERRITORY is finally
declared invalid or unenforceable in a judicial or administrative proceeding
from which no appeal is or can be taken, then from and after that date no
royalties shall be paid on the basis of that PATENT in the relevant country of
the TERRITORY, provided, however, that royalties due for other PATENTS in the
TERRITORY not so held invalid or unenforceable shall not be affected.
-3-
<PAGE> 4
2.9 Settlement - Any settlement of an infringement suit, whether
brought by DOW or by NEOPROBE, shall be subject to the consent of both Parties,
which consent shall not be unreasonably withheld.
ARTICLE III
OBLIGATIONS OF NEOPROBE
3.1 License Fees: NEOPROBE agrees to and shall pay the following
license fees to DOW pursuant to the rights granted NEOPROBE by DOW hereunder: a
royalty as stated in Article 3.4(a), (b) and (d) of the TTA, to be paid for the
life of any PATENT in any country in the TERRITORY in which PRODUCT or
RADIOLABELLED SUCCESSOR ANTIBODY is manufactured or sold under any such PATENT,
and if no PATENT(s) issues in a country, then so long as a royalty is due and
payable under Article 3.4(b) of the TTA.
This royalty is IN ADDITION TO that royalty due DOW under the TTA and
under the License for the I2 Process under Articles 2.6 and 3.4(c) of the TTA.
Once all PATENTS have expired and the term for payment under Article 3.4(b) of
the TTA has lapsed, then NEOPROBE shall have a paid up license.
3.2 Periodic Statements: Within forty-five (45) days after the initial
shipment of PRODUCT and/or RADIOLABELLED SUCCESSOR ANTIBODY occurs, and promptly
within thirty (30) days following each calendar quarter thereafter, NEOPROBE
shall furnish to DOW complete and accurate statements, certified to be accurate
by NEOPROBE, showing the number, description and gross sales price, itemized
deductions from gross sales price and NET SALES of the PRODUCT and/or
RADIOLABELLED SUCCESSOR ANTIBODY covered by this LICENSE distributed and/or sold
by NEOPROBE during the preceding calendar quarter, together with any returns
made during the preceding calendar quarter. These statements shall also include
status of applications for regulatory approvals in the TERRITORY, manufacturing
facilities and entity(ies), AFFILIATES or sublicensees that are preparing,
making, using or selling PRODUCT or RADIOLABELLED SUCCESSOR ANTIBODY, and
projected plans for commercialization and sales in the TERRITORY. Such
statements shall be furnished to DOW whether or not any of the PRODUCT or
RADIOLABELLED SUCCESSOR ANTIBODY has been sold during the preceding calendar
quarter.
3.3 Records: NEOPROBE agrees to keep accurate books of account and
records covering all transactions relating to the LICENSE, and an independent
certified public accountant selected by DOW and approved by NEOPROBE, which
approval shall not be unreasonably withheld, shall have the right at all
reasonable business hours to an examination of said books of account and records
and of all other documents and materials in the possession or under the control
of NEOPROBE with respect to the subject matter and terms of this LICENSE, and
shall have free and full access thereto for said purposes and for the purpose of
verifying payments due under Article 3.1 above. Any such examination shall be
made no more frequently than once in any twelve (12) month period during the
term hereof, unless DOW has reasonable cause for additional review. If such
examination demonstrates that the royalty and fees paid by NEOPROBE to DOW have
been understated by more than five percent (5%), then the cost of such
examination shall be borne by NEOPROBE; otherwise, the cost of such examination
shall be borne by DOW. All books of account and records shall be kept available
for at least three (3) years after the year in which sales were made, including
three (3) years after the last year that payments are due under Article 3.1
hereunder.
3.4 Material Breach: Should NEOPROBE
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<PAGE> 5
(i) fail to make any payments when due to DOW under this LICENSE for a
period of ninety (90) days after they are due without any cure or fail
to fully cure within hundred (100) days from the payment due date; or
(ii) fail to achieve the fifty thousand dollar ($50,000) annual minimum
sales for NET SALES for PRODUCT, NON-RADIOLABELLED PRODUCT or SUCCESSOR
ANTIBODIES during the first year of commercialization and every year
thereafter as required under the TTA; or
(iii) fail to meet the diligence requirements under Article 3.5; or
(iv) assign this LICENSE without DOW's prior written consent; or
(v) sublicense any portion of this LICENSE without providing DOW with a
copy of the signed sublicense agreement within thirty (30) days of its
signature and which sublicense shall have terms at least as rigorous by
NEOPROBE's obligations under this LICENSE; or
(vi) sell, sublicense or otherwise cause to be available on the market
any PRODUCT or RADIOLABELLED SUCCESSOR ANTIBODIES for use outside the
FIELD, unless a license is obtained by NEOPROBE from NIH for
diagnostics with respect to the SUCCESSOR ANTIBODIES or unless a
license is obtained by NEOPROBE from NIH and DOW for RIT with respect
to the SUCCESSOR ANTIBODIES or unless a further license is obtained by
NEOPROBE from DOW with respect to uses out side the FIELD; or
(vii) fail to provide the periodic statements under Article 3.2;
then all rights and licenses granted by DOW shall terminate and revert to DOW,
unless a modification in terms is agreed to in writing by DOW.
3.5 Diligence: NEOPROBE shall use its reasonable commercial efforts
under the circumstances to (i) commercialize the PRODUCT or RADIOLABELLED
SUCCESSOR ANTIBODIES (which effort shall be no less than those of any other
commercial product of NEOPROBE or its AFFILIATE(S) or sublicensee(s) and within
the usual standards for such products in the pharmaceutical industry); and (ii)
meet the benchmarks and diligence requirements stated in the signed NIH/NCI
agreement for the FIELD. NEOPROBE agrees to supply to both DOW and NIH/NCI its
development plan and establish the required benchmarks under the DOW sublicense
with NIH/NCI.
3.6 Confidentiality: NEOPROBE shall continue to hold all information
received from DOW under Article 2.3(c) of the TTA and received under Article 2.2
of this LICENSE confidential and not disclose it to or make copies for anyone
not an employee of NEOPROBE or its AFFILIATE for five (5) years from the
Effective Date unless a written release is obtained from NIH/NCI and DOW. A copy
of the release signed by NIH/NCI must be provided to DOW prior to NEOPROBE
requesting DOW's release. An exception to this provision is that NEOPROBE may
disclose the information to their outside counsel or consultants who are under
just as strict a confidentiality agreement terms as the TTA and this LICENSE
with NEOPROBE.
3.7 Compliance for NIH/NCI: NEOPROBE acknowledges that it must comply
with the TTA and its ADDENDUM especially with respect to the terms granted by
NIH/NCI to DOW as reflected by the obligations under Article 2.3 of the TTA and
the ADDENDUM to be able to practice under this LICENSE. As NEOPROBE shall
perform DOW's obligations under DOW's sublicense from NIH/NCI, NEOPROBE agrees
to comply with requests by NIH/NCI under any of DOW's obligations for SUCCESSOR
ANTIBODIES in accord with the DOW CRADA for requirements during the CRADA's term
and commercial sublicense from PHS.
3.8 Indemnification: NEOPROBE shall defend, indemnify and hold DOW and
its employees, officers, directors, agents and affiliates harmless from and
against all liability, demands, damages, expenses
-5-
<PAGE> 6
and losses, including but not limited to death, personal injury, illness or
property damage in connection with or arising out of the use by NEOPROBE, its
AFFILIATES and sublicensees, directors, or employees of (a) any PRODUCT (meaning
for this Article 3.8 either as granted hereunder for SUCCESSOR ANTIBODIES or as
granted under the TTA for ANTIBODY or for their RADIOLABELLED PRODUCTS), or (b)
the design, manufacture, distribution or use of any PRODUCT or technology or
samples provided of SUCCESSOR ANTIBODIES or ANTIBODIES or other products or
processes developed in connection with or arising out of this LICENSE in the
FIELD. NEOPROBE agrees to maintain a liability insurance program consistent with
sound business practice throughout the term of the TTA and this LICENSE.
ARTICLE IV
GENERAL CONDITIONS
4.1 Governing Law: This LICENSE shall be governed by and construed and
interpreted in accordance with the laws of the State of Ohio, excluding any
choice of law rules which may direct application of the laws of any other
jurisdiction.
4.2 Waivers: The failure of any Party to enforce any right hereunder
shall not be deemed a waiver of that right of any continuing or subsequent
breach of this LICENSE.
4.3 Amendments: No amendment of or modification to this LICENSE shall
be valid unless expressed in writing and signed by both Parties.
4.4 Headings: Article and section headings contained in this LICENSE
are included for convenience only and form no part of the LICENSE between the
Parties.
4.5 Severability: If any provision of this LICENSE is or becomes or is
deemed invalid, illegal, unenforceable, in any jurisdiction,
(a) such provision shall be deemed amended to conform to
applicable laws of such jurisdiction so as to be valid and enforceable, or if it
cannot be so amended without materially altering the intention of the Parties,
it will be stricken;
(b) the validity, legality, and enforceability of such
provision will not in any way be affected or impaired thereby in any other
jurisdiction; and
(c) the remainder of this LICENSE will remain in full force
and effect.
4.6 Assignment: Except as expressly provided herein, this LICENSE
(including any of the rights or obligations contained herein) may not be
assigned by either Party without the prior written consent of the other, which
consent may not be unreasonably withheld. This LICENSE shall be binding upon and
inure to the benefit of DOW and NEOPROBE and their successors.
4.7 Absence of Conflict: Each of the Parties, in order to induce the
other Party to enter into and perform this LICENSE, hereby represents and
warrants that neither the execution nor delivery of this LICENSE, or the
consummation of the transactions herein contemplated, nor the fulfillment of or
compliance with its terms and conditions, will conflict with, result in a breach
of or constitute a default under any law, material contract, agreement or
instrument by which it or its properties are bound. Each of the Parties further
represents and warrants that it will take all corporate action necessary for the
authorization, execution, delivery, and performance of this LICENSE and, when
executed, this LICENSE will constitute a valid and binding obligation of each
Party.
-6-
<PAGE> 7
4.8 Use of Names: Nothing in this LICENSE shall imply any right by
either Party to use the other Party's name, trademark, service mark, or logo of
any kind without the prior written consent of such other Party, except if
desired for purposes of publicizing the existence of the relationship of the
Parties hereunder, which if done shall be done jointly by the Parties.
4.9 Compliance with Law and Force Majeure : Anything to the contrary in
this LICENSE notwithstanding, the obligations of each Party hereto shall be
subject to all laws, regulations, or orders, both present and future, and any
government having jurisdiction over such Party, including but not limited to the
U.S. Export Administration Regulations. NEOPROBE agrees to comply with all
necessary governmental regulations in the TERRITORY with respect to export of
any PRODUCT or know-how, or SUCCESSOR ANTIBODY or RADIOLABELLED PRODUCT in the
TERRITORY. NEOPROBE agrees to not export or re-export any know-how, PRODUCT,
SUCCESSOR ANTIBODIES, or RADIOLABELLED PRODUCT received from DOW or the direct
products of such technology to any prohibited country listed in the U.S. Export
Administration Regulations unless properly authorized by the U.S. Government.
NEOPROBE shall be responsible for the acts of its AFFILIATES, contractors,
consultants and sublicensees. NEOPROBE assumes all liability if it or its
AFFILIATES fails to obtain any of the necessary licenses or commits any
violations of the United States Export Laws or Regulations (15 C.F.R. Section
700 et seq.).
Neither of the Parties hereto shall be liable to the other for any
loss, injury, delay, damages, or other casualty suffered or incurred by such
other Party due to war, fire, flood, strike, labor trouble, breakage of
equipment, accident, riot, action of governmental authority and laws, rules,
ordinances, and regulations (including, but not limited to, those dealing with
pollution, health, ecology, production of radioactive isotopes, or environmental
matters), act of God, or contingency which is beyond the reasonable control of
such Party, and any failure or delay by either of the Parties hereto in
performance of any of its obligations under this LICENSE due to one or more of
the foregoing cause shall not be considered a breach of this LICENSE.
4.10 Further Assurances: The Parties agree to execute such additional
document(s) as may be reasonably necessary, acceptable and appropriate to
protect each Party's rights in connection with said Party's use of the other
Party's technology.
4.11 TTA: This LICENSE shall be held as fully satisfying each Party's
obligation with regard to Article 1.3(b) under the TTA. Other provisions of the
TTA and its ADDENDUM which must be retained with this LICENSE for the FIELD for
the PROCESS are also included within the terms of this LICENSE. Such provisions
include, but are not limited to, Articles 2.3,3.4(a), (b), (c) and (d) and the
entire ADDENDUM.
4.12 Notices: Any notice or other communication required or permitted
to be given hereunder shall be in writing and deemed given when sent if by telex
or facsimile transmission, or when deposited with the cable or telegraph
company, or when mailed with first class postage prepaid or by courier, and
shall be addressed as follows:
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<PAGE> 8
If to DOW:
Michael J. Mintz, Ph.D.
Director
External Technology
The Dow Chemical Company
2030 The Dow Center, Abbott Road
Midland, MI 48674
telephone: 517-636-9458
facsimile: 517-636-8127
(Technology issues)
William Dowd, Ph.D.
Director
Materials R & D
The Dow Chemical Company
1707 Building, Washington Street
Midland, MI 48674
telephone: 517-636-1360
facsimile: 517-638-9547
with a copy to:
Karen L. Kimble, JD
Senior Counsel
The Dow Chemical Company
1790 Building, Washington Street
Midland, MI 48674
telephone: 517-636- 1687
facsimile: 517-638-97862
If to NEOPROBE:
Neoprobe Corporation
Attention: President
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
telephone: 614-793-7500
facsimile: 614-793-7522
with a copy to:
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<PAGE> 9
J. K. Mueller, Jr., Esq.
MUELLER AND SMITH, L.P.A.
MUELLER-SMITH BUILDING
7700 Rivers Edge Drive
Columbus, Ohio 43235
telephone: 614-436-0600
facsimile: 614-436-0057
Either Party may give written notice of a change of address, and after
such notice is received, any notice thereafter shall be given to such Party at
such changed address.
4.13 Prior Agreements: All terms from the TTA, ADDENDUM, AMENDMENT
EXTENSION, SECOND AMENDMENT and License for the 12 technology are retained
unchanged and all terms from the TTA also apply to this LICENSE unless
specifically altered herein.
IN WITNESS WHEREOF, the Parties have caused this LICENSE to be executed in
duplicate by their duly authorized representatives on the date last written
below.
THE DOW CHEMICAL COMPANY NEOPROBE CORPORATION
By: s/ Fred P. Corson By: s/ David C. Bupp
------------------------------- -------------------------------
Fred P. Corson David C. Bupp
Title: Vice President Title: President and
Research and Development Chief Operating Officer
Date: May 1, 1996 Date: May 1, 1996
----------------------------- -----------------------------
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<PAGE> 1
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
Exhibit 10.3.46
LICENSE AGREEMENT
THIS license agreement (hereinafter "License) is made between THE DOW
CHEMICAL COMPANY (hereinafter "DOW"), a corporation duly formed and existing
under the laws of the State of Delaware, having a place of business at 2030
Willard H. Dow Center, Abbott Road, Midland, Michigan 48674, United States of
America, and Neoprobe Corporation (hereinafter "NEOPROBE"), a corporation duly
formed and existing under the laws of the State of Delaware, having a place of
business at 425 Metro Place North, Dublin, Ohio 43017-1367;
WITNESSETH:
WHEREAS, DOW is engaged in certain research and development involving
certain radioactive conjugated agents used for localization in specific tissue;
and
WHEREAS, DOW has proprietary rights in technology relating to said agents,
including: patent rights, know-how, and other industrial property rights; and
WHEREAS, NEOPROBE desires to undertake the further development and
commercial exploitation of said agents; and
WHEREAS, NEOPROBE desires to obtain an exclusive, global license for DOW's
technology relating to said agents; and
WHEREAS, DOW is willing to grant said license to NEOPROBE; and
WHEREAS, DOW and NEOPROBE have signed a Confidentiality Agreement, effective
from September 16,1988; and
WHEREAS, DOW and NEOPROBE have signed a Letter of Intent, effective January
29,1996 which terms are included in this License.
NOW, THEREFORE, DOW and NEOPROBE, in consideration of the mutual covenants
contained herein, hereto agree as follows:
ARTICLE 1
DEFINITIONS
When used in this License, the following terms shall have the meanings set
out below, unless the context requires otherwise. The singular shall be
interpreted as including the plural and vice versa, unless the context clearly
indicates otherwise.
1.1 "AFFILIATE" means a corporation or any other entity that at any time
during the term of this License directly or indirectly through one or more
intermediaries is CONTROLLED by the designated Party, but only for so long as
the relationship exists. A corporation or other entity shall no longer be an
AFFILIATE when through loss, divestment, dilution or other reduction of a
Party's ownership, the Party losses CONTROL of such corporation or other entity.
<PAGE> 2
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
1.2 "ANTIBODY or ANTIBODIES" as used herein means one or more antibodies
directed against carcinoma associated antigens and selected from:
(a) certain antibodies developed by Dr. Jeffrey Schlom and his associates at
the Laboratory of Tumor Immunology and Biology, National Cancer Institute,
National Institutes of Health under a CRADA, and further described as:
(1) monoclonal antibodies COL-1 through 15 which are directed
against various restricted epitopes of the 180,000 dalton
carcinoembryonic antigen complex, and
(2) some forty (40) monoclonal antibodies directed against the
purified TAG-72 antigen and designated CC1 through 92,
including CC49; and
(b) successor antibodies to the above, developed by DOW or NIH/NCI under the
above CRADA (during the term of the CRADA) as replacements therefor in the
FIELDS.
1.3 "APPROVAL" means final approval by a HEALTH AUTHORITY in any country
where applicable in the TERRITORY, for commercial marketing of PRODUCT,
including approval of final labeling and price approval.
1.4 "CDA" means a confidential disclosure agreement, Confidentiality
Agreement, effective from September 16, 1988, between the Parties. A copy is
attached as Appendix B.
1.5 "CONFIDENTIAL INFORMATION" means any information of either Party
regarding TECHNOLOGY, PATENTS, any samples of ANTIBODY or PRODUCT, financial
terms of this License, and business development plans for the PRODUCT. and does
not include information excluded under Article 8.2.
1.6 "CONTROL" or "CONTROLLED" shall mean, in the case of a corporation,
ownership or control, directly or indirectly, of more than fifty percent (50%)
of the shares of stock entitled to vote for the election of directors and, in
the case of an entity other than a corporation, ownership or control, directly
or indirectly, of more than 50% of the assets or the ability to direct the
management and affairs of such entity.
1.7 "CRADA" means an Cooperative Research and Development Agreement between
DOW and PHS, effective from February 1, 1987 until it expired on February 1,
1995, and its amendments, for the development of ANTIBODIES by Dr. Jeffrey
Schlom and his associates at the Laboratory of Tumor Immunology and Biology,
National Cancer Institute, National Institutes of Health (NIH/NCI). A copy, with
amendments, is attached as Appendix D.
1.8 "DMF" means DOW's drug master file and supporting documentation for the
preparation of the PRODUCT for FIELD (II) on file at the FDA.
1.9 "DOE" means the United States Department of Energy and corresponding
agencies of other countries in the TERRITORY.
1.10 "EFFECTIVE DATE" means the date of the last signature of the Parties to
this License.
1.11 "FDA" means the United States Food and Drug Administration or any
successor U.S. governmental agency performing similar functions.
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
1.12 "FIELD (I)" means Radioimmunoguided Surgery(TM) or RlGS(R) (trademarks
of NEOPROBE) procedure which is defined as the injection into a human of either
a RADIOLABELLED ANTIBODY joined to a LINKER or a RADIOLABELLED RECEPTOR LIGAND
joined to a LINKER followed by the use of a hand-held radioactivity detecting
probe (and not a gamma scanner) topically or during surgery to detect tumor
lesions. Such procedure includes administration to a patient of a RADIOLABELLED
ANTIBODY followed by the elapse of time for the RADIOLABELLED ANTIBODY to
preferentially concentrate in any neoplastic tissue in the patient and for the
background radioactivity in the patient to decrease, and the detection of such
preferentially concentrated RADIOLABELLED ANTIBODY by a detector probe placed in
juxtaposition with tissue suspected of containing said RADIOLABELLED ANTIBODY;
and any surgical method claimed in NEOPROBE's U.S. Patent 4,782,840, or any
reissue or extension thereof, or any corresponding patent application or patent
in any country in the TERRITORY. This FIELD does not include the use of
RADIOLABELLED ANTIBODIES at doses or energies high enough to exert, or be
reasonably expected to exert, a cytotoxic or cytocidal effect on tumor cells (an
effect sometimes referred to as radioimmunotherapy). This FIELD does not include
the use of monoclonal antibodies, radiolabelled or modified in other ways, for
external imaging. This FIELD is intended to comprise a medical use in humans of
a PRODUCT that requires government APPROVAL by a HEALTH AUTHORITY prior to
commercialization. Specifically excluded are the fields encompassed within the
TTA and CRADA.
1.13 "FIELD (II)" means the use in humans for radioimmunotherapy ("RIT") of
either a RADIOLABELLED ANTIBODY with a LINKER intended to destroy cancer cells
which is subject to the terms of the CRADA or a RADIOLABELLED RECEPTOR LIGAND
joined to a LINKER at doses or energies high enough to exert, or be reasonably
expected to exert, a cytotoxic or cytocidal effect on tumor cells. This FIELD is
intended to comprise a medical use in humans of a PRODUCT that requires
government APPROVAL by a HEALTH AUTHORITY prior to commercialization.
1.14 "FIELDS" means collectively FIELD (I) and FIELD (II).
1.15 "GMPs" means the Good Manufacturing Practices as defined from time to
time in the United States Food, Drug and Cosmetics Act and related regulations
or any successor laws or regulations governing the manufacture of the PRODUCT in
the United States.
1.16 "HEALTH AUTHORITY" means the agency corresponding to the FDA of each
country in the TERRITORY, including but not limited to the Center of
Pharmaceutical Speciality ("CPS") procedure agency (or any successor agency) for
WESTERN EUROPE.
1.17 "LETTER OF INTENT" means the letter agreement between the Parties
effective January 29,1996, concerning the subject matter of this License. A copy
is attached as Appendix C.
1.18 "LINKERS" means bifunctional organic molecules used to join ANTIBODIES
or RECEPTOR LIGANDS with radionuclides used in PRODUCT
1.19 "NET SALES" shall mean the amount invoiced on sales of PRODUCT by
NEOPROBE and its AFFILIATES to a THIRD PARTY, less the following deductions to
the extent included in the amounts invoiced:
(i) trade, cash or quantity discounts actually allowed, granted from
the invoiced amount and taken; and
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
(ii) amounts repaid or credited by reason of rejections, defects or
returns or because of retroactive price reductions; and
(iii) insurance, if included in the amount invoiced; and
(iv) rebates paid pursuant to government regulations; and
(v) taxes or governmental charges for export/import fees or radioactive
waste disposal fees by governmental authorities in the TERRITORY on the
sales of PRODUCT to said THIRD PARTY, if included in said invoiced
amount, whether denominated as value added taxes, sales taxes, or
excise taxes, to the extent included in said invoiced amount.
NET SALES shall not include sales between or among NEOPROBE and its AFFILIATES.
1.20 "NRC" means the United States Nuclear Regulatory Commission, and
corresponding agencies of any foreign government in the TERRITORY.
1.21 "PATENTS" means all patent applications and patents, together with any
continuations, divisions, reissues and extensions of the foregoing which claims
cover the process or manufacture, use or sale of LINKER, ANTIBODY or PRODUCT in
the FIELDS in the TERRITORY which are owned, licensed or controlled by DOW or
which become owned, licensed or controlled by DOW during the life of this
License. The PATENTS existing which claims cover the FIELDS in the TERRITORY on
the EFFECTIVE DATE are listed in APPENDIX A, which is attached hereto and made a
part hereof. APPENDIX A shall be amended from time to time, at NEOPROBE's
request, but no more frequently than once yearly, unless required to provide
information to compute the payments due under this License.
1.22 "PRODUCT" means a RADIOLABELLED pharmaceutical composition or
formulation joined to a LINKER, as a finished, packaged, product suitable for
shipment and use in one of the FIELDS.
1.23 "RADIOLABELLED" means PRODUCT labeled, either with or without a LINKER
present, with a radionuclide selected from 1231, 1251, 13l1 or the lanthanide
series of radioisotopes, excluding Gd.
1.24 "RECEPTOR LIGAND" means any site specific compound for human in vivo
use, other than ANTIBODY, known to the public as of January 29, 1996, capable of
delivery of the PRODUCT containing it to an intended tumor cell, except for
compounds containing dendrimers, peptides or carbohydrates.
1.25 "TECHNOLOGY" means information, know-how, trade secrets, and data,
relating to the manufacture of ANTIBODY, LINKER or PRODUCT or its use in the
FIELDS which DOW owns as of the EFFECTIVE DATE or is otherwise lawfully in the
possession of DOW during the TRANSFER PERIOD. The TECHNOLOGY includes all
unpublished technical information regarding the formulations, toxicology,
clinical data and results done by or reasonably available to DOW, preclinical
data (including pharmaceutical and toxicological), animal data, compositions,
process of making, DMF information, testing, packing, shipping, handling, and
using ANTIBODY, LINKER and PRODUCT, and production techniques, packaging and
handling techniques, quality control procedures, stability data, confidential
material specifications, and files to which DOW has the right to disclose and
license to third parties. Such TECHNOLOGY EXPRESSLY EXCLUDES process
information, know-how, trade secrets, and data, relating to the manufacture of
precursors to LINKERS.
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
1.25 "TERRITORY" means worldwide, EXCLUDING any countries prohibited or
restricted under Article 11.
1.26 "THIRD PARTY" means anyone, other than NEOPROBE and its AFFILIATES.
Thus THIRD PARTY includes, without limitation, physicians, hospitals, clinics,
hospice facilities, patients, distributors, sublicensees, formularies, and
radiopharmacies.
1.27 "TRANSFER PERIOD" means from the EFFECTIVE DATE until December 1, 1996.
1.28 "TTA" means the Technology Transfer Agreement between the Parties
having an effective date of July 29,1992 and its amendments.
ARTICLE 2
GRANT OF LICENSE
2.1 Grant of License - DOW hereby grants to NEOPROBE, and NEOPROBE hereby
accepts:
(a) an EXCLUSIVE license to use the TECHNOLOGY to make, have made, use, sell
and have sold PRODUCT in the TERRITORY in FIELD (I), and an exclusive license
under the PATENTS listed in Appendix A to make, have made, use, sell and have
sold PRODUCT in the TERRITORY in FIELD (I). This License shall be fully
exclusive, to the exclusion of DOW and its AFFILIATES, but subject to Article
2.3, and so long as this License is in effect; and
(b) an EXCLUSIVE license to use the TECHNOLOGY to make, have made, use, sell
and have sold PRODUCT which contains RECEPTOR LIGAND in the TERRITORY in FIELD
(II), and an EXCLUSIVE license under the PATENTS listed in APPENDIX A to make,
have made, use, sell and have sold PRODUCT which contains RECEPTOR LIGAND in the
TERRITORY in FIELD (II). This License shall be fully exclusive, to the exclusion
of DOW and its AFFILIATES, but subject to Article 2.3, and so long as this
License is in effect; and
(c) a NON-EXCLUSIVE license to use the TECHNOLOGY to make, have made, use,
sell and have sold PRODUCT which contains ANTIBODY in the TERRITORY in FIELD
(II), and a NON-EXCLUSIVE license under the PATENTS listed in APPENDIX A to
make, have made, use, sell and have sold PRODUCT which contains ANTIBODY in the
TERRITORY in FIELD (II). This grant shall be become fully exclusive, to the
exclusion of DOW and its AFFILIATES, but subject to Article 2.3, upon NEOPROBE
obtaining a license from NCI (or from the appropriate governmental entity), and
so long as this License is in effect.
2.2 SUBLICENSING - The exclusive license under Article 2.1 (a) and (b) to
NEOPROBE includes the right to sublicense third parties, whether or not
AFFILIATES of NEOPROBE, including the right to enter into distributor contracts.
NEOPROBE will make and will be responsible for all payments to DOW as a result
of sublicensee and AFFILIATE sales of PRODUCT in the FIELDS in the TERRITORY.
NEOPROBE will also be responsible for the observance by all sublicensees of all
applicable provisions of this License, and will use its best efforts to cause
all sublicenses to observe the covenants in this License (i.e., regarding
confidentiality, maintenance of records and reporting of NET SALES and royalty
payments, exchanges of information and adverse reaction information). All such
sublicenses shall be in writing.
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
If NEOPROBE desires to sublicense under Article 2.1 (c), it must do so in
accord with the terms of this License and the provisions of the CRADA.
Notification of PHS is required.
2.3 Reservations - DOW reserves the following rights.
2.3.1 DOW reserves the right to make, have made, and use LINKER or
PRODUCT in FIELD (II) in the TERRITORY for the purposes of:
(i) process research;
(ii) basic research and development; and
(iii) publication of results obtained prior to the EFFECTIVE DATE with
a copy to NEOPROBE.
2.3.2 DOW reserves the right for DOW to proceed, solely at its option
and expense, to research, develop, make, have made, use, sell, have sold and
license in the TERRITORY the following compounds and complexes for use within
FIELD (II):
(i) RECEPTOR LIGANDS that are proprietary to other than NEOPROBE; and
(ii) PRODUCTS with any radionuclide (including Gd) other than (123)I,
(125)I, (13l)I and the lanthanide series (excluding Gd).
2.3.3 DOW reserves the right for DOW to proceed, solely at its option
and expense, to research, develop, make, have made, use, sell ,have sold and
license, in the TERRITORY OUTSIDE the FIELDS:
(i) LINKER; and
(ii) complexes of LINKER with any metal including (123)I, (125)I,
(131)I and the lanthanide series; and
(iii) products and antibodies joined with other linkers with any metal,
including but not limited to (123)I, (125)I, (131)I and the lanthanide
series.
2.4 Supply of LINKER for PRODUCT - DOW and NEOPROBE may enter into a
separate commercial supply agreement under which DOW will supply NEOPROBE's
requirements of LINKER for PRODUCT on mutually agreed terms and conditions. This
Article 2.4 shall not imply an obligation on either Party to enter into a
commercial supply agreement. If NEOPROBE employs a third party manufacturer for
LINKER for PRODUCT, DOW shall assist NEOPROBE with TECHNOLOGY transfer to such
manufacturer, but only that TECHNOLOGY which DOW is willing or able to disclose.
2.5 Results Available to DOW - NEOPROBE shall make available to DOW or DOW's
licensees at no cost all results obtained using LINKERS in PRODUCTS for use by
DOW or DOW's licensees in accord with. Article 2.3.
2.6 CRADA - For NEOPROBE to attain exclusivity under Article 2.1(c) for
PRODUCTS containing ANTIBODY for FIELD (II), it is contingent upon NEOPROBE also
acquiring an exclusive license from NCI under the CRADA rights within a
reasonable time period or acquiring a non-exclusive grant from
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
NCI. DOW shall be notified when such grant from NCI has been obtained by
NEOPROBE and a copy of the signed pages(s) of that agreement provided to confirm
the grant. At NEOPROBE's option, a copy of the agreement may be provided to DOW.
ARTICLE 3
TECHNOLOGY TRANSFER
3.1 Initial TECHNOLOGY Transfer - Part of the TECHNOLOGY has been
transferred to NEOPROBE regarding ANTIBODY and PRODUCT in FIELD (I) under a CDA
which shall be superseded by this License as of its EFFECTIVE DATE. All
TECHNOLOGY heretofore disclosed by DOW to NEOPROBE regarding ANTIBODY, LINKER
and PRODUCT (regardless of field of use) shall be deemed to have been disclosed
pursuant to this License and shall be subject to the provisions of this License
(including, but not limited to, Article 8 hereof). Further TECHNOLOGY transfer
may be carried out by oral, written or electronic means. It is contemplated that
TECHNOLOGY on ANTIBODY, LINKER and PRODUCT in FIELD existing on the EFFECTIVE
DATE or generated during the course of TECHNOLOGY transfer hereunder will have
been completely transferred within the TRANSFER PERIOD.
3.1.1 The Parties may arrange for meetings of their research and
development personnel from time to time during the TRANSFER PERIOD to facilitate
the transfer regarding PRODUCT, LINKER, ANTIBODY and TECH NO LOGY.
3.1.2 If DOW has any samples of LINKER available which can be provided,
NEOPROBE may request a portion of such samples during the TRANSFER PERIOD.
3.2 Costs - DOW will provide five (5) work days of 8 hours per day (200
hours) free of charge to NEOPROBE of technical support at a mutually agreed site
in the United States during the TRANSFER PERIOD. When possible for DOW,
additional work days will be provided by DOW when requested by NEOPROBE, until
one (1) year from the EFFECTIVE DATE, and DOW shall be reimbursed at the rate of
one thousand dollars ($1,000.00) per day or on a pro rata basis. All of DOW's
reasonable out-of-pocket expenses, e.g. travel, food, lodging, and normal
associated expenses, incurred to comply with Article 3.1 during the TRANSFER
PERIOD shall be paid by NEOPROBE. DOW shall supply such charges by invoice for
items over twenty-five dollars (US$25.00).
3.3 Adverse Drug Experience Reporting -
3.3.1 During the TRANSFER PERIOD each Party agrees to report to the
other Party, according to Article 16.1, any serious adverse reactions or any
side effects which occur or other adverse events with PRODUCT as promptly as
possible. Any such reactions or side effects must be reported (in full detail if
requested) irrespective of whether there is a causal connection with the PRODUCT
being administered or whether the causal connection is unclear or presumed to be
not likely. Reports shall be in English or accompanied by an English
translation.
For purposes of this reporting covenant, a serious adverse event is a
reaction which meets one or more of the following criteria:
- a reaction which is life threatening or fatal;
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
- a reaction which resulted in hospitalization, or if the patient was
already hospitalized, a reaction which prolonged hospitalization;
- a reaction which resulted in severe or permanent disability;
- a reaction which involved congenital anomaly or overdose, or cancer
which was not already present at the beginning of treatment with
PRODUCT; or
- a reaction which is considered to be important, significant or
otherwise medically serious.
3.3.2 The Parties also agree to report to each other in writing on a
mutually agreed periodic basis during the TRANSFER PERIOD for PRODUCT any and
all other adverse reactions or side effects (in full detail if requested)
regardless of seriousness or frequency of occurrence and irrespective of whether
there is a causal connection with the PRODUCT being administered or whether the
causal connection is unclear or presumed to be not likely.
3.3.3 If an adverse reaction occurs in a blinded Clinical Trial which
has not been unblinded, the adverse reaction will not be reported as in Article
3.3.1 or 3.3.2 above until the subject has been unblinded, in accordance with
the trial protocol or otherwise as may be required for regulatory, medical or
other reasons.
3.3.4 NEOPROBE, its AFFILIATES, sublicensees and contractors (parties
under contract with NEOPROBE or its AFFILIATES for the conduct of clinical
studies or obtention of registration for PRODUCT in the TERRITORY) shall be free
to include such reports from DOW in their required reporting of adverse drug
experiences to the HEALTH AUTHORITIES in the TERRITORY
3.3.5 After the TRANSFER PERIOD and during the life of this License,
NEOPROBE shall make all reports required under Article 3.3 to the appropriate
HEALTH AUTHORITIES in the TERRITORY.
3.3.6 NEOPROBE is aware that NCI has been conducting clinical trials using
PRODUCT containing ANTIBODY for FIELD (II). DOW and NEOPROBE do not warrant that
they have knowledge of or access to any adverse reports that may exist from
those trials.
3.4 Clinical Trials - PRODUCT containing ANTIBODY for FIELD (II)
3.4.1 During the TRANSFER PERIOD NEOPROBE shall attempt to obtain any
clinical data available to Dr. Jeffery Schlom and his associates who have been
running clinical trials. If NEOPROBE is successful at obtaining a license from
NCI under FIELD (II) for PRODUCT containing ANTIBODY, then such data should form
a portion of that license.
3.4.2 As of the EFFECTIVE DATE, DOW is no longer supplying LINKER or
ANTIBODY or PRODUCT to NCI for their clinical trials.
3.5 Restricted Information - Neither Party shall be obligated to
disclose to the other any information that it is contractually or legally
prohibited from disclosing to the other. In the event such a restriction
applies, the affected Party will notify the other Party, and the Parties will
use their good faith efforts, in-
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
cluding obtaining necessary consents or permits, to accomplish disclosure of
such information by consent or lawful means.
3.6 DOW's Assistance to NEOPROBE - After submission of the file in the
TERRITORY, NEOPROBE may ask for DOW's expertise to answer the rapporter's or
other HEALTH AUTHORITY'S questions, even after the end of the TRANSFER PERIOD.
If possible, DOW shall provide such reasonable assistance, at the expense of
NEOPROBE.
ARTICLE 4
TRANSFER PERIOD
4.1 Transfer Period - The Parties anticipate that the TRANSFER PERIOD will
be required to: a) complete the initial TECHNOLOGY transfer; b) conduct a Good
Clinical Practices and Good Laboratory Practices audit of existing data and
records; c) attempt to obtain access by NEOPROBE from NCI to any ongoing
clinical trial data in the TERRITORY for PRODUCT containing ANTIBODY for FIELD
(II); and d) permit access by the FDA to DOW's DMF or to the information
contained therein; and if necessary, permit access to the DMF by other HEALTH
AUTHORITIES.
4.2 Contact Persons - No later than thirty (30) days following the EFFECTIVE
DATE, NEOPROBE and DOW will each advise the other of their associates
responsible for handling the transition in as smooth and efficient a manner as
possible.
ARTICLE 5
NEOPROBE DEVELOPMENT, OTHER ACTIVITY, DILIGENCE
5.1 Development and Marketing Efforts for PRODUCT - NEOPROBE shall use its
best efforts to carry out remaining developmental work on PRODUCT as it believes
necessary and to file applications with the HEALTH AUTHORITIES as NEOPROBE deems
necessary. For purposes of this License, "best efforts" shall mean efforts
reasonably consistent with those efforts used by NEOPROBE with regard to its
developmental work and commercial activities for its own products deemed to have
similar commercial potential, consistent with its business, research and
development practices, and applicable legal and regu latory requirements. For
NEOPROBE to have been deemed by DOW to have used their best efforts, DOW expects
that in the TERRITORY NEOPROBE should:
5.1.1 Discuss with NCI concerning NEOPROBE's planned activities for
PRODUCT containing ANTIBODY for FIELD (II) after the EFFECTIVE DATE (NEOPROBE
may provide this License to NCI under confidentiality but with all financial
terms and FIELD (I) terms removed). All such discussions with NCI during the
term of this License shall be under confidentiality and shall be an exception
under Article 8.2;
5.1.2 Assume all liability (indemnification) for any Clinical Trials on
PRODUCT in the TERRITORY in the FIELDS which are done under NEOPROBE's direct
supervision and protocols after the EFFECTIVE DATE;
5.1.3 NEOPROBE shall provide DOW, by June 1, 1997, an initial
development plan and milestone schedule for the commercialization of RlGS(TM)
for FIELD (I) and RIT for FIELD (II) using the DOW licensed TECHNOLOGY and
PATENTS. DOW shall have the right to review NEOPROBE's supporting materials for
these development programs.
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
5.1.4 NEOPROBE shall provide DOW with a semiannual development report
outlining NEOPROBE's efforts to commercialize RIGS(TM) for FIELD (I) and RIT for
FIELD (II) using the DOW licensed TECHNOLOGY and PATENTS.
5.1.5 Begin Phase I/II Clinical Trials in the TERRITORY and Phase
II/III Clinical Trials in Europe and the United States for PRODUCT for the
FIELDS in accord with the NEOPROBE development plan.
NEOPROBE will promptly notify DOW of the occurrence of all of the preceding
events under Article 5.1 and supply DOW with proper notification and
certification of the occurrence of first commercial sale in each FIELD.
Because DOW is aware that despite NEOPROBE's best efforts, the dates in the
development plan may not be met, and upon NEOPROBE's discussion with DOW of the
reasons for the delay, and DOW's consent (which will not unreasonably be
withheld), these dates may be extended by a writing signed by both Parties while
retaining all the other terms of this License.
5.2 Development Progress Reports - NEOPROBE will provide DOW with semiannual
progress reports (reports to be verbal with one written annual report per year)
of its development and registration activity, including submission(s) to HEALTH
AUTHORITIES and APPROVAL(s) in the TERRITORY, until the PRODUCT is commercially
launched for both FIELDS throughout the TERRITORY
5.3 Failure to Attain APPROVAL -
5.3.1 If NEOPROBE fails to meet any of the dates specified in Article
5.1 and the reason for the failure was deemed by DOW to be beyond NEOPROBE's
control, e.g. delays by HEALTH AUTHORITIES, then the force majeure terms of
Article 15 apply to Article 5.1 and an extension in time equal to the force
majeure event shall automatically occur or NEOPROBE may terminate this License
under Article 14.
5.3.2 If NEOPROBE fails to meet any performance times specified in
Article 5.1 and the reason for the failure was reasonably deemed by DOW to be
within NEOPROBE's control, then DOW shall either extend the date with a written
copy of the new date provided under Article 16 and penalize NEOPROBE the
additional sum of 10% of the APPROVAL fees in Article 7.2 or terminate this
License under Article 14. NEOPROBE may indicate to DOW which option it prefers.
If this failure occurs more than once for reasons within NEOPROBE's control,
then the choice of above option resides with DOW.
5.3.3 The provisions of Article 5.3 shall be subject to the dispute
resolutions available under Article 17.
5.4 Clinical and Preclinical Studies - NEOPROBE shall carry out such further
studies, at its expense, of ANTIBODY, LINKER and PRODUCT as it deems necessary
or advisable to develop the PRODUCT and in order to file such forms for APPROVAL
with the HEALTH AUTHORITIES for commercialization in the TERRITORY for both
FIELDS.
5.5 NEOPROBE Responsibility - NEOPROBE shall be solely responsible for the
planning, design and execution of all its developmental work and
commercialization with ANTIBODY, LINKER and PRODUCT for the TERRITORY after the
EFFECTIVE DATE using TECHNOLOGY and PATENTS. NEOPROBE shall make any required
reports to NCI if the PRODUCT falls within the CRADA.
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Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
5.6 Regulatory Costs - All regulatory costs for APPROVALS in the TERRITORY
shall be borne by NEOPROBE after the EFFECTIVE DATE.
5.7 Future Research - Upon the EFFECTIVE DATE, NEOPROBE agrees that any
research conducted by DOW on ANTIBODY, LINKER or PRODUCT at NEOPROBE's request
during the TRANSFER PERIOD shall be paid by NEOPROBE. Any research conducted by
DOW on ANTIBODY, LINKER or PRODUCT after the TRANSFER PERIOD shall be in accord
with Article 2.3. DOW will draft any resulting patent applications and/or retain
title to the patents conceived or reduced to practice during the TRANSFER
PERIOD, but NEOPROBE will be exclusively licensed under this License for the
TERRITORY for the FIELDS so long as this License is in effect.
ARTICLE 6
PATENT RIGHTS
6.1 DOW to Maintain PATENTS - DOW shall be responsible at its own cost and
expense for prosecuting the patent applications in PATENTS and for maintaining
and extending the PATENTS listed on APPENDIX A. DOW shall use good faith efforts
to prosecute, issue and maintain all PATENTS in APPENDIX A.
6.2 NEOPROBE to Assist DOW in extension or restoration of PATENTS - Although
DOW shall be responsible for extension or restoration of PATENTS listed on
APPENDIX A, NEOPROBE agrees to provide DOW with reasonably requested records,
information and assistance to achieve the extension or restoration of any
PATENTS in the TERRITORY.
6.3 Notice of Patent Lapse - DOW shall promptly advise NEOPROBE of the
grant, lapse, nullification, revocation, surrender, or invalidation of any of
the PATENTS.
6.4 Validity, Non-Infringement -
6.4.1 DOW DOES NOT WARRANT that the manufacture, use and sale of the
ANTIBODY, LINKER or PRODUCT do not fall within the scope of third party patents
or the industrial property rights of a third party. However, to the best of
DOW's knowledge, information and belief, that as of the EFFECTIVE DATE, the
manufacture, use and sale of the ANTIBODY, LINKER or PRODUCT for the FIELDS does
not fall within the scope of third party patents which are not owned or licensed
by DOW.
6.4.2 Abbott Hold Harmless - By the terms of an Agreement between
Abbott Laboratories ("Abbott") and DOW effective October 23, 1995 (copy attached
hereto as APPENDIX E), NEOPROBE shall be considered as a Related Party and
granted a royalty free non-exclusive worldwide immunity from suit under Abbott
Patent Rights to make, have made, use, sell and have sold Macrocyclic Compounds
and compositions containing Macrocyclic Compounds; therefore, macrocyclic
LINKERS are included. Promptly after the EFFECTIVE DATE, DOW shall notify Abbott
in accord with Article 2.2 thereof.
6.5 Disclaimer of Warranties as to Patents - Other than as stated in Article
6.4, DOW makes no representation that the inventions covered in any PATENTS are
patentable or that the PATENTS are or will be valid or enforceable, nor does DOW
warrant or represent that the exercise of the rights licensed hereunder is free
of infringement of patent rights of third parties. Should any infringement or
damages be alleged, suit brought or damages collected therefore, no damages are
permitted to be collected from DOW.
-11-
<PAGE> 12
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
6.6 Prosecution of PATENTS by NEOPROBE - If NEOPROBE can obtain NCI's
written consent (together with OTT and/or any other required agency) to assume
the prosecution and maintenance of the patents under this License where CRADA
rights are concerned and such proof is provided to DOW, then DOW will consider
such proposal where all claims in the patent relate only to subject matter
exclusively licensed under this License to NEOPROBE and where DOW has no
interest in retaining other rights to the claims. It is understood that if this
event should occur, such patents will be exclusively licensed to NEOPROBE, not
assigned. Royalties and payments due DOW under Article 7 would continue.
6.7 Copies of PATENTS - After the EFFECTIVE DATE, DOW shall supply to
NEOPROBE's counsel indicated in Article 16.1 with a copy of each issued patent
in English or if not in English then with a copy of the last set of claims as
amended for issue in English. Copies of prosecution shall be supplied upon
NEOPROBE's request. If during prosecution issues arise that are of a significant
nature to the retention of the patent, DOW's counsel shall confer with
NEOPROBE's counsel on the best course of action. All decisions remain with DOW.
ARTICLE 7
PAYMENTS AND ROYALTIES
7.1 Initial Payment - NEOPROBE will pay to DOW within ten (10) days from the
EFFECTIVE DATE an initial payment of Two Million (US$2,000,000) Dollars paid in
fully registerable common stock with the number of shares owed computed from a
twenty (20) day trailing average of the closing price on the NASDAQ stock market
just prior to January 29, 1996 (the effective date of the LETTER OF INTENT)
(i.e., $16.025/share = 124,805 shares). Such stock shall be registerable on
demand by DOW with piggy back registration rights with all costs for such
registration paid by NEOPROBE. This payment will not be creditable against
future royalty payments or any other payments made under this License and is
nonrefundable.
7.2 Payments on Approvals - NEOPROBE will make additional fixed sum payments
to DOW, which payments will not be creditable against future royalty payments,
in the following amounts and events:
* (US$*) Dollars upon first APPROVAL of a PRODUCT for either FIELD
(I) or FIELD (II) that uses TECHNOLOGY. Such fee shall be due even if
the PATENTS have expired.
7.3 Sublicensing Fees - DOW shall be paid by NEOPROBE * percent (* %) of all
licensing revenue received for sublicensing in FIELD (I) or FIELD (II) which
includes DOW's TECHNOLOGY or PATENTS. Thus, if NEOPROBE sublicenses the
ANTIBODY, LINKER or PRODUCT such that a third party (nonaffiliated to NEOPROBE)
sells the ANTIBODY, LINKER or PRODUCT, then NEOPROBE shall pay DOW * (* %)
percent of all payments (i.e., up front fees, milestone payments, minimum annual
fees, etc.) received by NEOPROBE and, in addition, the royalty of * (* %)
percent of the earned royalty received by NEOPROBE.
7.4 Earned Royalties for PATENTS - NEOPROBE will pay DOW an earned royalty
of * Percent (* %) of NET SALES of PRODUCT, the manufacture, use or sale of
which would infringe a valid, unexpired claim of one or more of the PATENTS
UNDER APPENDIX A. (For example, if PRODUCT is manufactured in France under a
PATENT and that PRODUCT (including components or kits such as ANTIBODY or
LINKER) is sold in the TERRITORY of Algeria, then NEOPROBE would pay DOW this
earned royalty of *% on all NET SALES on the PRODUCT in Algeria.)
* Omitted and filed separately under Rule 24b-2 pursuant to which Neoprobe
Corporation has requested confidential treatment of this information.
- 12 -
<PAGE> 13
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
No royalties are due under this Article 7.4 under any claim of a PATENT
which is held invalid by a court of competent jurisdiction from which no appeal
is or can be taken
No royalties are due under this Article 7.4 after the last to expire PATENT
on APPENDIX A expires and after any patent term restoration or extension term
ceases.
7.5 Royalties for TECHNOLOGY License - This fee is completely paid under
Articles 7.2 and 7.7.
7.6 Royalties for Equity and Research - Royalty shall not include equity
investments and research contract revenues received by NEOPROBE.
7.7 Achievement of Milestone Payments - A one time payment is due DOW the
first year that total NET SALES for PRODUCTS in FIELD (I) and FIELD (II) that
use DOW TECHNOLOGY achieve the following levels:
<TABLE>
<CAPTION>
Net Sales Milestone Payments
----------------------------
Sales Achieve Payment
(Millions $US) (Millions $US)
<S> <C> <C>
---------------------------------------
* *
---------------------------------------
* *
---------------------------------------
* *
---------------------------------------
</TABLE>
These milestone payments are not creditable against royalties.
These Milestone Payments shall be due until the last to expire PATENT
expires or until ten (10) years from the first APPROVAL, whichever event occurs
later in time.
7.8 Minimum Annual Payments - Commercial sale of the PRODUCT for both
FIELDS is expected in the TERRITORY. After the first year upon receipt of the
first APPROVAL for either FIELD (I) or FIELD (II) by any HEALTH AUTHORITY and
for the whole term where NEOPROBE would manufacture, use or sell a PRODUCT which
would infringe a valid, unexpired claim of one or more of the PATENTS listed in
APPENDIX A, then NEOPROBE shall pay DOW the following minimum annual royalty:
<TABLE>
<CAPTION>
Minimum Annual Royalties
--------------------------
YEAR**
January 1 US$
<S> <C> <C>
---------------------------
2 -4 *
---------------------------
5 - on *
---------------------------
</TABLE>
**The calendar year in which first
Approval is obtained is year zero
All the above sums include any and all taxes required to be paid or withheld
by NEOPROBE on DOW's behalf. The earned royalty may be credited against this
minimum fee. The minimum fee may be paid in earned royalty and/or cash.
* Omitted and filed separately under Rule 24b-2 pursuant to which Neoprobe
Corporation has requested confidential treatment of this information.
-13-
<PAGE> 14
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment under Rule 24b-2
Minimum annual royalty payments are due at the same time as any fourth
quarter earned royalty payments under Articles 7.3, 7.4, 7.5 and 7.6 in
accordance with Article 7.10.
7.9 Payments - A report, including: the amount of payment with the date the
payment was made; an itemized payment listing; and date of this License under
which payment is being made and the number _________, shall be sent to:
The Dow Chemical Company
Royalty Accounting
2020 Building
Midland. Ml 48674
With payment by wire transfer to THE DOW CHEMICAL COMPANY and sent to:
Citibank of New York
New York, NY
For the account of The Dow Chemical Company
7.10 Quarterly Royalty Reports and Payments - Within sixty (60) days after
the close of each calendar quarter, NEOPROBE shall submit a report on the NET
SALES of PRODUCT in the FIELD for the TERRITORY in sufficient detail to enable a
calculation of the royalty due in accord with Article 7 and payment of the
royalty (if any) due.
7.11 Books of Account - NEOPROBE shall maintain true and complete books of
account containing an accurate record of all data necessary for the proper
computation of royalty payments due from it or on behalf of any AFFILIATE. Such
records shall be maintained for at least five (5) years after the date of the
Pertinent royalty payment.
7.12 Audit Right - DOW shall have the right, either through a certified
public accountant employed by DOW or through a firm of independent public
accountants to whom NEOPROBE has no reasonable objection, to examine the books
of account of NEOPROBE at reasonable times within three (3) years after the end
of the calendar year to which they relate (but not more than once in each
calendar year) for the purpose of verifying the correctness of any report
concerning diligence or payment of royalties under Articles 5 and 7,
respectively. Such examination shall be made during normal business hours at the
place of business of NEOPROBE. The information furnished as a result of any such
examination shall be maintained in confidence on the terms specified in Article
8. The fees and expenses of such an audit shall be borne by DOW. If any such
audit shows any underpayment or overcharge, a correcting payment or refund shall
be made within thirty (30) days of NEOPROBE' receipt of the auditors' statement.
If such error is material (meaning +5%), then if NEOPROBE owes DOW from such
material error, NEOPROBE shall be subject to a penalty as if the payment were
deemed late in accord with Article 7.14. Should NEOPROBE fail to make any
correcting payment within sixty (60) days from receipt of the auditors'
statement, then DOW shall have the rig ht to terminate this License under
Article 14.5.
- 14 -
<PAGE> 15
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
7.13 Withholding Tax Payments - If any taxes for DOW's account, withholding
or otherwise, are levied by any taxing authority in the TERRITORY in connection
with the receipt by DOW of any amounts payable under Article 7 of this License
according to any tax treaty or agreement between the United States AND ANY
country in the TERRITORY, then NEOPROBE shall have the right to pay such taxes
to the local tax authorities and the payment to DOW of the net amount due after
reduction by the amount of such taxes, together with
(i) evidence of payment of such taxes and a translation thereof into
English,
(ii) indication of the amount of such tax paid, and
(iii) indication of the country in the TERRITORY and the authority to
whom it was paid, and comply with NEOPROBE's royalty reporting
obligations under this License.
However, if DOW still requires further information, the report due under Article
7.10 may also be requested by DOW and NEOPROBE shall promptly provide that
information.
7.14 Late Payments - Royalty payments not remitted or deposited by the due
date shall bear interest at the current prime rate plus 2% established by a
leading New York bank, such as CitiBank, as published in The Wall Street
Journal. Should NEOPROBE fail to make any late payment within sixty (60) days
from its due date, then DOW shall have the right to terminate this License under
Article 14.5 upon fifteen (15) days written notice to NEOPROBE to allow cure.
ARTICLE 8
CONFIDENTIALITY
8.1 Each Party shall use good faith efforts to retain in confidence and not
disclose to any third party each other's Confidential Information (which
includes, but is not limited to, TECHNOLOGY, PATENTS, and any samples of
ANTIBODY, LINKER or PRODUCT) disclosed pursuant to the terms of this License.
Such "good faith efforts" shall mean the same degree of care, but no less than a
reasonable degree of care, as the receiving Party uses to protect its own
Confidential Information of a like nature. NEOPROBE shall use the same good
faith efforts with respect to the DOW TECHNOLOGY already in its possession.
8.2 Excepted from the obligation of confidence under Article 8.1 is that
information which:
(a) is available, or becomes available, to the general public without
fault of the receiving Party; or
(b) is obtained by the receiving Party without an obligation of
confidence from a third party (other than the FDA or a HEALTH
AUTHORITY) who is rightfully in possession of such information
and is under no obligation of confidentiality to the disclosing
Party concerning such information; or
(c) is required by law or by court order to be disclosed by the
receiving Party in which cases the receiving Party will use its
best efforts to limit such disclosure to that required by law and
to maintain the confidentiality of the disclosed information to
the extent possible; or
(d) must be necessarily disclosed to HEALTH AUTHORITIES to permit
NEOPROBE to sell PRODUCT in the FIELD; or
- 15 -
<PAGE> 16
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
(e) may be disclosed in accord with Article 2.3.1, 3.3.6 or 3.4.1; or
(f) is necessary to disclose to the NIH/NCI under a CRADA for either
FIELD or to obtain the license contemplated under Article 2.1(c);
or
(g) is released from confidentiality in writing by the disclosing
Party.
For the purpose of Article 8.1, a specific item of TECHNOLOGY shall not be
deemed to be within the foregoing exceptions merely because it is embraced by
more general information in the public domain or in the possession of the
receiving Party. In addition, any combination of features shall not be deemed to
be within the foregoing exceptions merely because individual features are in the
public domain or in the possession of the receiving Party, but only if the
combination itself and its principle of operation are in the public domain or in
the possession of the receiving Party.
8.3 Notwithstanding the provisions of Article 8.1, if the receiving Party
becomes legally compelled to disclose any of the disclosing Party's TECHNOLOGY,
the receiving Party shall promptly advise the disclosing Party of such required
disclosure in order that the disclosing Party may seek a protective order or
such other remedy as the disclosing Party may consider appropriate in the
circumstances. The receiving Party shall disclose only that portion of the
TECHNOLOGY which it is legally required to disclose. Such a disclosure shall not
release the receiving Party with respect to the TECHNOLOGY so disclosed except
to the extent of permitting the required disclosure.
8.4 Disclosure to AFFILIATES, Contractors - NEOPROBE may disclose
TECHNOLOGY to its AFFILIATES, sublicensees, consultants and, when permitted
herein, its clinical investigators, contractors (parties under contract with
NEOPROBE or its AFFILIATES for the custom manufacturing or shipping of PRODUCT,
conduct of clinical studies or obtention of registration in the TERRITORY), as
may be necessary to exercise the rights granted hereunder and to register and
prepare for commercialization of PRODUCT, and to commercialize PRODUCT under
this License, under conditions of confidentiality at least as stringent as those
set out in Articles 8.1, 8.2 and 8.3.
8.5 Document Return - In the event of termination of this License under
Article 14.2, 14.3 (if the breach is by NEOPROBE), 14.4, 14.5 or 14.6 prior to
its normal expiration, NEOPROBE will cease its use of the TECHNOLOGY and other
CONFIDENTIAL INFORMATION provided hereunder and, on DOW's request, within sixty
(60) days either return all such CONFIDENTIAL INFORMATION, including any copies
thereof, or will promptly destroy the same and certify such destruction to DOW;
except that such CONFIDENTIAL INFORMATION as is or has become no longer subject
to confidentiality under Article 8.1 need not be returned or destroyed.
Notwithstanding the foregoing, NEOPROBE may retain such documents as are
necessary for it to discharge its surviving obligations hereunder and its legal
obligations to the governmental authorities for counterpart agencies to DOE and
NRC; and NEOPROBE may retain such copies of documents as may be necessary for
the defense of product liability or other litigation or similar proceedings
relating to ANTIBODY or PRODUCT, and may retain one copy thereof in its legal
department as a record of what was transmitted.
8.6 Survival of Confidentiality - Termination of this License for any
reason shall not relieve the Parties of their obligations under Article 8. The
provisions of Article 8 shall survive termination of this License for twenty
(20) years.
- 16 -
<PAGE> 17
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
8.7 Confidentiality Agreement Extension - The CDA was expanded in scope in
the LETTER OF INTENT. All disclosures between the Parties since the effective
date of the CDA with regard to the subject matter of this License are deemed to
have been disclosed under that CDA. After the EFFECTIVE DATE this License shall
supersede the CDA with respect to the present subject matter for PRODUCT for the
FIELDS.
ARTICLE 9
THIRD PARTY INFRINGEMENT CLAIMS
9.1 Defense of Third Party Patent Claims - If a claim is brought by a third
party that manufacture, use or the sale of LINKER or PRODUCT in the TERRITORY
(regardless of use) infringes a patent of such third party, NEOPROBE will give
prompt written notice to DOW of such claim if it concerns a PATENT or
TECHNOLOGY. DOW shall have the sole discretion and right to seek to dispose of
said claim or to conduct the defense of any suit resulting from such claim if
outside the FIELDS in the TERRITORY. NEOPROBE at its option and expense may
participate in any Suit resulting from such claim that directly affects its
market in the FIELDS in the TERRITORY.
If the claim brought by a third party that manufacture, use or the sale of
ANTIBODY in the TERRITORY (regardless of use) infringes a patent of such third
party, NEOPROBE will give prompt written notice to DOW and NCI of such claim if
it concerns a PATENT or TECHNOLOGY. DOW shall have the sole discretion and right
to seek to dispose of said claim or to conduct the defense of any suit resulting
from such claim in the FIELDS in the TERRITORY. DOW shall confer with NCI as
required under the CRADA or the Commercial License for FIELD (I). NEOPROBE at
its option and expense may participate in any suit resulting from such claim
that directly affects its market in the FIELDS in the TERRITORY.
9.2 Mutual Decisions - From the EFFECTIVE DATE and using their good faith
efforts, NEOPROBE and DOW shall discuss any claim or suit brought by a third
party for patent infringement that such third party's patent is infringed by the
manufacture, use or sale of ANTIBODY, LINKER or PRODUCT by NEOPROBE or its
AFFILIATES in the FIELDS in the TERRITORY. Specifically, NEOPROBE and DOW shall
mutually try to agree on: the strategy for such suit or claim, e.g. whether to
negotiate a set tlement, sue or withdraw from the country in the TERRITORY in
which infringement is claimed; the basis to be determined for sharing the costs
of litigation, damages awarded, and royalty to be paid to the third party; which
Party should conduct the defense or if both NEOPROBE and DOW should jointly
defend; the consequences of such decisions, such as amendment to this License
with regard to royalties due to DOW; and any obligations or royalty payment
modifications due NCI for ANTIBODY
9.3 Third Party License - The Parties shall use their good faith efforts
(either individually or together) to negotiate any necessary agreement for
royalty payment to third parties with a view to enabling the PRODUCT to be
commercialized in the FIELDS in the TERRITORY. As of the EFFECTIVE DATE, DOW is
not aware of the need for any such third party license that is not already
obtained .
ARTICLE 10
PATENT ENFORCEMENT LITIGATION
10.1 Prosecution by DOW - DOW, at its sole discretion, may take action on
its own behalf and expense to institute any action or proceeding by reason of
infringement of any of the PATENTS. If either Party learns of any infringement
of a PATENT or misappropriation of trade secrets or TECHNOLOGY by a third party,
it shall promptly notify the other Party.
- 17 -
<PAGE> 18
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
DOW shall have the first right, at its own expense, to prosecute all
litigation against a third party infringer who may be infringing a PATENT.
NEOPROBE shall provide all reasonable cooperation, including any necessary use
of its name, required to prosecute such litigation. NEOPROBE shall be consulted
concerning the litigation. DOW will bear the costs and shall be entitled to any
recovery obtained from such litigation, settlement or compromise thereof.
10.2 Prosecution by NEOPROBE - If DOW does not prosecute such infringer or
otherwise abate such infringement (which infringement must be of commercial
significance to NEOPROBE in DOW's reasonable business opinion) within ninety
(90) days after giving or receiving notification of such infringement in the
TERRITORY, unless an extension of the term is mutually agreed upon by the
Parties, then, NEOPROBE shall have the right to prosecute such infringer at its
own expense in the FIELDS in the TERRITORY and shall be entitled to retain any
recovery obtained from such litigation, settlement or compromise thereof.
NEOPROBE's cost of litigation in any quarter may be credited against up to fifty
(50%) percent of the royalties due to DOW under Articles 7.4, 7.5 and 7.6 in the
following quarter. However, NEOPROBE shall place all royalties due to DOW in
escrow from the date of filing the suit until the action or proceeding is
finally concluded whereupon:
if the PATENT in the country in the TERRITORY is held valid (whether
infringed or not), then the royalties in escrow (after deduction of
NEOPROBE's cost of litigation as referred to hereinabove) shall be paid
to DOW; or
if the PATENT in the country in the TERRITORY is held invalid (whether
infringed or not), then the royalties in escrow shall be paid to
NEOPROBE.
At NEOPROBE's request, DOW shall cooperate with NEOPROBE in such
litigation, including joining in said litigation. DOW shall also cooperate, at
NEOPROBE's expense, by way of providing access to evidence and witnesses
available to DOW.
10.3 Prosecution by neither NEOPROBE or DOW - If DOW decides, after
consulting with NEOPROBE, that neither DOW nor NEOPROBE will defend the PATENT
in a FIELD in the particular country in the TERRITORY, then the royalty for that
PATENT for that FIELD in that country becomes zero (0%) percent upon that
decision date
10.4 Invalidity - In the event that a PATENT in the TERRITORY is finally
declared invalid or unenforceable in a judicial or administrative proceeding
from which no appeal is or can be taken, then from and after that date no
royalties shall be paid on the basis of that PATENT in the relevant country of
the TERRITORY, subject to the provisions of Article 10.2, provided, however,
that royalties due for other PATENTS in the TERRITORY not so held invalid or
unenforceable or royalties for use of TECHNOLOGY shall not be affected.
10.5 Settlement - Any settlement of an infringement suit, whether brought
by DOW or by NEOPROBE, shall be subject to the consent of both Parties, which
consent shall not be unreasonably withheld.
10.6 Cooperation - Each Party shall cooperate with the other Party to the
extent reasonably requested in any legal action:
(i) brought by a third party against one Party or
- 18 -
<PAGE> 19
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
(ii) brought by a third party against both of them or
(iii) taken against a third party by either Party
regarding PATENTS in the FIELDS in the TERRITORY, and each Party shall have the
right to participate in any defense, compromise or settlement to the extent
that, in its judgment, it may be prejudiced thereby. In addition, NEOPROBE shall
not settle any claim or suit in any manner that shall adversely affect any
PATENTS, require any payment by DOW or reduce the royalty due to DOW hereunder
without the prior written consent of DOW, except as provided in Article 10.2.
ARTICLE 11
U.S. EXPORT CONTROL AND GOVERNMENT LICENSES
11.1 Compliance - NEOPROBE agrees to comply with all necessary United
States governmental regulations with respect to export of TECHNOLOGY and any
PRODUCT, ANTIBODY, RADIOLABELLED PRODUCT or LINKER in the TERRITORY. NEOPROBE
agrees to not export or re-export any TECHNOLOGY, PRODUCT, ANTIBODY,
RADIOLABELLED PRODUCT or LINKER received from DOW or the direct products of such
TECHNOLOGY to any prohibited country listed in the U.S. Export Administration
Regulations unless properly authorized by the U.S. Government. NEOPROBE shall be
responsible for the acts of its AFFILIATES, contractors, consultants and
sublicensees. NEOPROBE assumes all liability if it or its AFFILIATES fails to
obtain any of the necessary licenses or commits any violations of the United
States Export Laws or Regulations (15 C.F.R. Section 700 et seq.).
11.2 DOE, NRC Licenses - NEOPROBE agrees to obtain all necessary licenses
and to comply with all applicable regulations of agencies similar to DOE and NRC
in the TERRITORY with respect to PRODUCT and RADIOLABELLED PRODUCT.
11.3 Clearances - NEOPROBE agrees to obtain all necessary clearances from
any government in the TERRITORY for export or re-export with respect to the
TECHNOLOGY or PRODUCT, RADIOLABELLED PRODUCT, ANTIBODY or LINKER.
ARTICLE 12
PRODUCT LIABILITY AND INDEMNIFICATION
12.1 Indemnity by DOW - DOW shall indemnify and hold NEOPROBE, its agents,
directors, officers, employees and AFFILIATES harmless from and against any and
all liabilities, claims, demands, damages, costs, expenses or money judgments
(including reasonable attorneys' fees and expenses) incurred by or rendered
against any of them for personal injury, sickness, disease or death or property
damage which directly arise out of:
(a) the intentional misconduct or negligence of DOW; or
(b) the breach by DOW of its warranties given in Article 6.6 of this
License or in any applicable supply agreement under Article 2.4;
provided, however, that NEOPROBE shall give DOW notice in writing as soon as
practicable of any such claim or lawsuit and shall permit DOW to undertake the
defense thereof at DOW's expense. However,
- 19 -
<PAGE> 20
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
(i) NEOPROBE will cooperate in such defense by providing access to
witnesses and evidence available to it. NEOPROBE shall have the
right to participate in any defense to the extent that in its
judgment, NEOPROBE may be prejudiced thereby; and
(ii) in any claim or suit in which NEOPROBE seeks indemnification by
DOW, NEOPROBE shall not settle, offer to settle or admit
liability or damages in any such claim or suit without the prior
written consent of DOW
12.2 Indemnity by NEOPROBE - NEOPROBE shall indemnify and hold DOW and
AFFILIATES, and their respective agents, directors, officers, employees harmless
from and against any and all liabilities, claims, demands, damages, costs,
expenses or money judgments (including reasonable attorneys' fees and expenses)
incurred by or rendered against any of them for personal injury, sickness,
disease or death or property damage which arise out of
(i) the manufacturing, testing, use, promotion, sale or distribution
of ANTIBODY, LINKER, RADIOLABELLED PRODUCT or PRODUCT by NEOPROBE
or its AFFILIATES, except for those instances provided in Article
12.1 for which DOW is obligated to indemnify NEOPROBE; or
(ii) the breach by NEOPROBE of any of its representations, warranties
or covenants contained in this License or any agreement
contemplated by the terms of this License,
provided, however, that DOW shall give NEOPROBE notice in writing accord with
Article 16 as soon as practicable of any such claim or lawsuit and shall permit
NEOPROBE to undertake the defense thereof at NEOPROBE's expense. However,
(i) DOW will cooperate in such defense by providing access to
witnesses and evidence available to it. DOW shall have the right
to participate in any defense to the extent that in its judgment,
DOW may be prejudiced thereby; and
(ii) In any claim or suit in which DOW seeks indemnification by
NEOPROBE, DOW shall not settle, offer to settle or admit
liability or damages in any such claim or suit without the prior
written consent of NEOPROBE.
ARTICLE 13
TECHNOLOGY WARRANTY, DISCLAIMER, INSURANCE
13.1 Belief of Accuracy - DOW represents that the TECHNOLOGY, and any other
CONFIDENTIAL INFORMATION transferred or provided to NEOPROBE hereunder, are
believed to be accurate and complete as of their current status at DOW at the
EFFECTIVE DATE and that DOW's interpretations and conclusions drawn therefrom
were made in good faith and in the exercise of DOW's sci entific judgment as of
the dates of the documents contained therein, and that to the best of DOW's
knowledge, data subject to regulations regarding Good Laboratory Practices and
Good Clinical Practices, GMP and other FDA regulations, is in compliance with
such regulations. However, DOW does not warrant or represent that such
information is or will be sufficient to obtain APPROVAL to market PRODUCT or
to commercially produce RADIOLABELLED PRODUCT or PRODUCT or to commercialize
PRODUCT with HEALTH AUTHORITIES in the TERRITORY.
- 20 -
<PAGE> 21
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
NEOPROBE represents that it will be solely relying on its own evaluation of
the TECHNOLOGY and the other CONFIDENTIAL INFORMATION transferred or provided to
it hereunder and on its own medical and scientific expertise in using the same
in its development and commercialization of PRODUCT in each FIELD.
13.2 Insurance - NEOPROBE agrees to carry such liability insurance as would
reasonably be expected of a company of NEOPROBE's net worth operating in the
pharmaceutical industry and sufficient to meet any governmental requirements.
Written assurance that such insurance is in effect must be provide to DOW by the
EFFECTIVE DATE. NEOPROBE agrees to maintain such insurance for the term of this
License.
ARTICLE 14
TERM AND TERMINATION
14.1 Term - Unless terminated under the provisions of this Article 14, this
License shall continue in effect until the expiration of all PATENTS listed on
APPENdix A or until ten (10) years from the first APPROVAL for TECHNOLOGY,
whichever occurs last, provided, however, that Articles 8, 11, 12, 13, and 18
contained in this License shall survive termination of this License.
When this License expires under this Article 14.1, the licenses granted
under this License shall be paid-up; however, any payments still due under
Article 7.7 will continue until paid in full.
14.2 Failure to Use License - If NEOPROBE and its AFFILIATES shall have
(i) discontinued selling PRODUCT in commercial quantities using their
best efforts in accord with Article 5 to commercialize; or
(ii) not commercialized PRODUCT in accord with Article 5; or
(iii) not paid the minimum annual royalty required in full when due
under Article 7.8,
then NEOPROBE shall have the right to terminate this License upon ninety (90)
days written notice.
If termination under this Article 14.2 results, then NEOPROBE shall
promptly supply to DOW all registration information for HEALTH AUTHORITIES that
is available to NEOPROBE or its AFFILIATES for use by DOW, its AFFILIATES or
sublicensees, at no cost to DOW, all rights granted by the License together with
the rights received under the CRADA that are DOW's.
If this License is terminated under Article 5.3 when within NEOPROBE's
control, then NEOPROBE shall promptly supply to DOW all registration information
for HEALTH AUTHORITIES that is available to NEOPROBE or its AFFILIATES for use
by DOW, its AFFILIATES or sublicensees without compensation to NEOPROBE by DOW
together with the rights received under the CRADA that are DOW's..
14.3 Termination for Breach - In the event of a material breach by either
DOW or NEOPROBE of any of the obligations contained in this License, the other
Party shall be entitled to terminate this License by notice in writing under
Article 16 provided that such notice shall specify the breach or breaches
complained of. If the said breach or breaches are capable of remedy, the Party
committing such breach or breaches shall be entitled to a period of sixty (60)
days from the delivery of such notice in which to remedy or to
- 21 -
<PAGE> 22
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
undertake to remedy the same. In the case the defaulting Party shall fail to
remedy the breach or to undertake to remedy the breach to the satisfaction of
the injured Party, the injured Party shall have the right to cancel this License
in whole or, if reasonable to the injured Party, only terminate those rights and
obligations relating to the particular breach by simply notification to the
Party in default. Failure of a Party to exercise its rights under this Article
14.3 shall not be construed as a waiver as to future breaches whether or not
they are similar.
14.4 Termination by NEOPROBE - NEOPROBE may surrender and terminate this
License on ninety (90) days written notice to DOW in accord with Article 16.
NEOPROBE will disclose to DOW its reasons for any such termination.
14.5 Termination by DOW - DOW shall have the right to terminate this
License immediately on written notice to NEOPROBE if:
(a) NEOPROBE shall cease to carry on business or shall go into
liquidation or a receiver shall be appointed to NEOPROBE's
assets; or
(b) NEOPROBE shall become bankrupt or insolvent or unable to meet any
of its financial obligations in full on their due dates; or
(c) NEOPROBE fails to meet any of its payments in full when due in
accord with Article 7; or
(d) NEOPROBE fails to meet its diligence requirements under Article
5; or
(e) NEOPROBE fails to maintain accurate records or to provide the
written reports required in accord with Article 7.
14.6 On Termination - NEOPROBE shall, upon termination of this License by DOW
under Articles 14.2, 14.3 or 14.5 or termination by NEOPROBE under Article 14.2,
14.3 or 14.4:
(a) return to DOW all copies of documents containing TECHNOLOGY and
any materials received from DOW under confidentiality and
CONFIDENTIAL INFORMATION concerning ANTIBODY, LINKER,
RADIOLABELLED PRODUCT and PRODUCT in the FIELDS;
(b) pay to DOW all payments and royalties due or accrued at the
termination date within thirty (30) days after termination, and
pay to DOW all payments due under Article 7.7, but if termination
under Article 14.3 (if breach by NEOPROBE) or 14.5, then Article
7.7, if applicable, shall be accelerated and due within said
thirty (30) days; and
(c) make no further use of any kind of any and all TECHNOLOGY
disclosed hereunder by DOW, except to the extent such information
has become public knowledge other than through fault of NEOPROBE,
and make no further use of the surviving PATENTS; and
(d) take all steps necessary and execute any instruments required to
assign all the rights relative to-any government health
registrations of PRODUCT in each FIELD held by NEOPROBE to DOW or
to DOW's designee and to assist DOW or its designee to obtain new
government health registrations for the PRODUCT in each FIELD,
and, if such new registrations are obtained by DOW or its
designee, NEOPROBE agrees to notify the
- 22 -
<PAGE> 23
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
HEALTH AUTHORITIES to cancel all those registrations of PRODUCT
in each FIELD which are in the name of NEOPROBE, subject to
reimbursement by DOW of NEOPROBE's out-of-pocket expenses of
obtaining such registrations (except in the case of termination
for breach by NEOPROBE); and
(e) assign to DOW any distributorships, PRODUCT manufacturing
agreements and sublicense agreements, to the extent they are
specific to the PRODUCT or RADIOLABELLED PRODUCT or LINKER or
ANTIBODY for at least one FIELD and are assignable and to the
extent such agreements were previously agreed with DOW to survive
termination of this License; or, at DOW's option, terminate such
agreements as are terminable unilaterally by NEOPROBE.
14.7 Survival of Certain Obligations - On termination of this License: the
obligations of confidentiality set forth in Article 8 shall survive for the time
stated therein; adverse reaction reporting set forth in Article 3.5 shall
survive; Export Control compliance set forth in Article 11 shall survive; and
the indemnification obligations set forth in Article 12 shall also survive as to
all claims or actions arising from events which occurred before termination.
ARTICLE 1 5
FORCE MAJEURE
15.1 Event of Force Majeure - In the event that performance under this
License, or any obligation hereunder, is hindered, delayed or prevented by
reason of acts of God, strikes, lockouts, labor troubles, intervention of any
governmental authority,-fire, riots, insurrections, invasions, war or other
reason of simi lar nature beyond the reasonable control of the Party and are
without its fault or negligence, then performance of that act shall be excused
for the period of the delay and the period for the performance of that act shall
be extended for an equivalent period.
15.2 Notification. Upon occurrence of an event of force majeure, the
affected Party shall promptly notify the other Party in writing, setting forth
the nature of the occurrence, its expected duration and how that Party's
performance is affected. The affected Party shall resume the performance of its
obligations as soon as practicable after the force majeure event ceases.
ARTICLE 16
NOTICES
16.1 Official -Any notice, request or communication specifically provided
for or permitted to be given under this License must be in writing and may be
delivered by courier service, registered mail, or electronic transmission such
as facsimile or electronic mail, and shall be deemed effective as of the time of
actual delivery thereof to the addressee. For purposes of notice the addresses
of the Parties shall be as follows:
DOW: The Dow Chemical Company
2030 Willard H. Dow Center
Midland, Michigan 48674
U.S.A.
Attention: Michael J. Mintz, PhD
Director
- 23 -
<PAGE> 24
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
External Technology
Telephone: 517 - 636 - 9458
Facsimile: 517 - 636 - 8127
with a copy to:
The Dow Chemical Company
Patent Department
1790 Building, Washington Street
Midland, Michigan 48674
Attention: Karen L. Kimble, JD
Senior Counsel
Telephone: 517 - 636 - 1687
Facsimile: 517 - 638 - 9786
NEOPROBE: Neoprobe Corporation
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
Attention: David C. Bupp
President and
Chief Operating Officer
Telephone: 614 - 793 - 7500
Facsimile: 614 - 793 - 7522
with a copy to:
MUELLER AND SMITH, L.P.A.
MUELLER-SMITH BUILDING
7700 Rivers Edge Drive
Columbus, Ohio 43235
Attention: J. K. Mueller, Jr., Esq.
Telephone: 614 - 436 - 0600
Facsimile: 614 - 436 - 0057
16.2 Transition - For purposes of coordination during the TRANSFER PERIOD,
the addresses of the Parties shall be as follows:
DOW: The Dow Chemical Company
1707 Building
Midland Michigan 48674
- 24 -
<PAGE> 25
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
Attention: Dr. William Dowd
Director
Materials R & D
Telephone: 517 - 636 - 1360
Facsimile: 517 - 638 - 9547
NEOPROBE: Neoprobe Corporation
425 Metro Place North
Suite 400
Dublin, Ohio 43017-1367
Attention: Dr. William A. Eisenhardt
Telephone: 614 - 793 - 7500
Facsimile: 614 - 793 - 7520
16.3 Each Party may change its address and its representative for notice by
the giving of notice thereof in the manner hereinabove provided.
ARTICLE 17
DISPUTE RESOLUTION
17.1 Choice of Law - This License shall be governed by the laws of Ohio,
excepting its conflict of laws principles, in all respects of validity,
construction and performance, except that all questions concerning the
construction, validity, coverage or infringement of PATENTS shall be decided in
accordance with the patent law of the country where the patent was granted.
17.2 Disputes - Both Parties shall make good faith efforts to resolve any
questions concerning construction and performance under this License, excluding
PATENTS and antitrust issues, by:
17.2.1 Notice, contact and resolution, all proceedings and documents in
English, between the Parties listed under Article 16.1 within one hundred twenty
(120) days from the date of the notice by negotiation either by telephone or by
meeting in Detroit, Michigan; and
17.2.2 If unsuccessful under Article 17.2.1, then senior executive
management with settlement authority and patent counsel of DOW and NEOPROBE
shall meet at a mutually agreeable location within sixty (60) days from a date
of notice that Article 17.2.1 failed to resolve the issues. Patent counsel shall
present the legal and factual arguments to such executives in English, with
supporting evidence if necessary, and resolution by these executives is expected
within ten (10) days, which may be reduced to writing in English as an amendment
to this License; and
17.2.3 If such executives have not met or resolved the issues under
Article 17.2.2, then within seventy five (75) days from the date of the notice
under Article 17.2.1, the Parties shall submit the issues to arbitration in
Chicago, IL, in English, in accordance with the Rules of the American
Arbitration Association ("AAA"), which may be modified by the Parties, and
judgment shall not be binding. The Parties agree that the following procedures
shall be adhered to even though they may, in part, not be in full conformance
with said Rules:
- 25 -
<PAGE> 26
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
(a) Three Arbitrators shall be selected from a list of at least 20
arbitrators selected by the AAA composed of patent counsel with
chemistry or pharmaceutical expertise who are practicing or
retired partners in law firms or in-house corporate patent
counsel, not affiliated with the Parties, with at least 10 years
of experience in patent law and knowledge of the pertinent laws
of any country relevant to the dispute. Each Party shall select
one Arbitrator and then the two Arbitrators shall select the
third. The arbitration proceedings and reports shall be in
English. The time from the beginning of submission for
arbitration and conclusion of any oral or written proceedings
shall not exceed six (6) months; and
(b) Limited discovery to only that which each Party has a
substantial, demonstrable need, and shall be conducted in the
most expeditious and cost-effective manner. The Arbitrators shall
resolve any issues with regard to the discovery. Decision by the
Arbitrators shall be given in writing within thirty (30) days
from the end of oral proceedings; and
(c) Although the decision by the Arbitrators is non-binding, should
either Party then litigate in a Court of competent jurisdiction
for the Parties, either Party may introduce the decision reached
by Arbitration with its supporting evidence.
ARTICLE 18
ASSIGNMENT
18.1 Assignment - Neither Party to this License shall assign any rights
hereunder without the prior written consent of the other Party, such consent not
to be unreasonably withheld. It being agreed, however, that without such consent
being required from DOW, NEOPROBE may assign to its AFFILIATES.
18.2 Consolidation, Reorganization or Merger- Should NEOPROBE be
consolidated, reorganized or merged with another entity, NEOPROBE may assign or
otherwise transfer this License to the successor entity or the assignee so long
as such assignment or transfer shall be accompanied by a sale or other trans fer
of all or substantially all of NEOPROBE's business and assets related to
ANTIBODY or PRODUCT without DOW's prior written consent, but NEOPROBE must
promptly notify DOW in accord with Article 16.1.
In any event where NEOPROBE is consolidated, reorganized or merged with
another entity and this License is assigned to them, then such AFFILIATE or
entity formed must have agreed to be bound by all terms of this License.
Notification that they are so bound (with documentation if requested by DOW),
must be supplied promptly to DOW in accord with Article 16.1.
18.3 Effect on Successors and Assignees - This License shall inure to the
benefit of and be binding upon such successors and permitted assignees.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 Amendments - This License may be amended only in writing executed by
both Parties.
19.2 Entirety of Agreement - This License sets forth the entire agreement
and understanding between the Parties hereto with respect to PRODUCT in the
FIELDS for their commercialization in the TERRITORY. The Parties agree that this
License is in compliance with the LETTER OF INTENT. No other agreements (e.g.,
the TTA; the ADDENDUM to the TTA, effective July 29,1992; the
- 26 -
<PAGE> 27
Omitted Portions of this Exhibit are Subject to a Request for Confidential
Treatment underRule 24b-2
AMENDMENT EXTENSION of the TTA, effective January 1,1995; the SECOND AMENDMENT
to the TTA, effective April 15,1996; the License for the 12 technology under the
terms of Articles 2.6 and 3.4(c) of the TTA, effective October 10, 1995; and the
License under the terms of Article 1.3(b) of the TTA, effective May 1, 1996
between the Parties is altered by this License and such other agreements remain
in full force and effect.
19.3 Severability - If any term or provision under this License is deemed
invalid under the laws of a particular country or jurisdiction, the invalidity
shall not invalidate the whole License but it shall be construed as if not
containing that particular term or provision and the rights and obligations of
the Parties shall be construed and enforced accordingly. The Parties shall
negotiate in good faith a substitute provision in compliance with the law to as
nearly as possible retain the Parties intent in legally valid language.
19.4 Waivers, Cumulative Remedies - A waiver by either Party of any term or
condition of this License in any one instance shall not be deemed construed to
be a waiver of such term or condition for any similar instance in the future or
of any subsequent breach hereof. All rights, remedies, undertakings, obliga
tions and agreements contained in this License shall be cumulative and none of
them shall be a limitation of any other remedy, right, undertaking, obligation
or agreement of either Party.
19.5 Public use - NEOPROBE shall not make any public statements regarding
this License without (a) DOW's prior written approval of such press release or
statement with regard to the use of D O W 's name, logos or trademarks and (b)
DOW's review and recommendations with regard to the description of DOW
TECHNOLOGY. If the DOW TECHNOLOGY or PATENTS is discussed in any public document
for the SEC or public offering, DOW shall have the right to review and recommend
changes to any description of the DOW TECHNOLOGY or PATENTS.
19.6 Headings- Headings in this License are included herein for ease of
reference and shall not affect the meaning of the provisions of this License,
nor shall they have any other legal effect.
19.7 Other Documents - Each Party agrees to execute such additional papers
or documents in customary legal form and to make such governmental filings or
applications as may be necessary or desirable to effect the purposes of this
License and carry out its provisions.
IN WITNESS WHEREOF, the Parties have duly executed this License in
duplicate by their appropriate authorized representative. Separate signature
pages are acceptable in facsimile form to each Party and the counterpart
original signatures shall have the date from the facsimile. This License shall
be deemed to have met all the conditions of the LETTER OF INTENT even if it is
not signed by both Parties by May 1, 1996.
THE DOW CHEMICAL COMPANY NEOPROBE CORPORATION
By s/ Fred P. Corson By s/ David C. Bupp
-------------------------------- -------------------------------------
Name: Fred P. Corson Name: David C. Bupp
Title: Vice President Title: President and
Research and Development Chief Operating Officer
- 27 -
<PAGE> 1
Exhibit 11.1
NEOPROBE CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Loss ($ 2,483,052) ($ 4,398,618) ($ 5,024,350) ($ 7,948,817)
------------ ------------ ------------ ------------
Weighted average number of
shares outstanding:
Weighted average common shares
outstanding beginning of period 13,857,768 17,426,614 10,854,515 17,334,800
Weighted average common shares
issued during period 165,318 2,314,091 2,085,370 1,245,859
------------ ------------ ------------ ------------
Weighted average number of shares
outstanding used in computing
primary net loss per share 14,023,086 19,740,705 12,939,885 18,580,659
------------ ------------ ------------ ------------
Weighted average number of shares
used in computing fully diluted
net loss per share 14,023,086 19,740,705 12,939,885 18,580,659
------------ ------------ ------------ ------------
Net Loss Per Share:
Primary ($ 0.18) ($ 0.22) ($ 0.39) ($ 0.43)
------------ ------------ ------------ ------------
Fully diluted ($ 0.18) ($ 0.22) ($ 0.39) ($ 0.43)
------------ ------------ ------------ ------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 29,596,610
<SECURITIES> 13,329,875
<RECEIVABLES> 128,397
<ALLOWANCES> 0
<INVENTORY> 331,693
<CURRENT-ASSETS> 1,435,118
<PP&E> 4,336,693
<DEPRECIATION> 0
<TOTAL-ASSETS> 53,265,870
<CURRENT-LIABILITIES> 2,541,921
<BONDS> 572,450
0
0
<COMMON> 19,957
<OTHER-SE> 50,131,542
<TOTAL-LIABILITY-AND-EQUITY> 53,265,870
<SALES> 355,816
<TOTAL-REVENUES> 355,816
<CGS> 229,974
<TOTAL-COSTS> 229,974
<OTHER-EXPENSES> 3,656,759
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,287
<INCOME-PRETAX> (7,948,817)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,948,817)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,948,817)
<EPS-PRIMARY> (0.43)
<EPS-DILUTED> (0.43)
</TABLE>
