<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM _______TO________
COMMISSION FILE NUMBER: 0-26520
NEOPROBE CORPORATION
(Exact name of registrant 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 300, DUBLIN, OHIO 43017
(Address of Principal Executive Offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 614.793.7500
Indicate by check whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
--- ---
26,071,777 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 April 25, 2000)
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
NEOPROBE CORPORATION
BALANCE SHEETS
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 2000 1999
---------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $2,714,969 $ 4,882,537
Accounts receivable, net 1,232,211 453,406
Inventory 488,664 1,134,427
Prepaid expenses and other 546,050 674,165
---------- -----------
Total current assets 4,981,894 7,144,535
---------- -----------
Investment in affiliates -- 1,500,000
Property and equipment 2,175,022 2,167,245
Less accumulated depreciation and amortization 1,336,355 1,264,299
---------- -----------
838,667 902,946
---------- -----------
Intangible assets, net 775,081 775,088
---------- -----------
Total assets $6,595,642 $10,322,569
========== ===========
</TABLE>
CONTINUED
2
<PAGE> 3
<TABLE>
NEOPROBE CORPORATION
BALANCE SHEETS, CONTINUED
<CAPTION>
MARCH 31, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 2000 1999
------------- -------------
<S> <C> <C>
Current liabilities:
Line of credit $ 100,000 $ 480,000
Notes payable to finance company 89,061 154,626
Capital lease obligations, current 75,137 87,007
Accrued liabilities 1,111,266 1,365,649
Accounts payable 451,284 759,961
Deferred license revenue, current 800,000 800,000
Obligation to preferred stockholder, current -- 2,500,000
------------- -------------
Total current liabilities 2,626,748 6,147,243
------------- -------------
Capital lease obligations 55,332 68,809
Deferred license revenue 2,800,000 3,000,000
Obligation to preferred stockholder -- 1,245,536
------------- -------------
Total liabilities 5,482,080 10,461,588
------------- -------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock; $.001 par value; 5,000,000 shares
authorized at March 31, 2000 and December 31, 1999;
none issued and outstanding (500,000 shares
designated as Series A, $.001 par value, at March
31, 2000 and and December 31, 1999; none outstanding) -- --
Common stock; $.001 par value; 50,000,000 shares
authorized; 26,070,777 shares issued and
outstanding at March 31, 2000; 23,046,644
shares issued and outstanding at December 31, 1999 26,071 23,047
Additional paid-in capital 120,683,623 119,407,204
Accumulated deficit (119,596,132) (119,569,270)
------------- -------------
Total stockholders' equity (deficit) 1,113,562 (139,019)
------------- -------------
Total liabilities and stockholders' equity (deficit) $ 6,595,642 $ 10,322,569
============= =============
</TABLE>
See accompanying notes to the financial statements
3
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<TABLE>
NEOPROBE CORPORATION
STATEMENTS OF OPERATIONS
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
2000 1999
----------- -----------
<S> <C> <C>
Revenues:
Net sales $ 1,605,811 $ 1,910,971
License revenue 250,000 --
----------- -----------
Total revenues 1,855,811 1,910,971
----------- -----------
Cost of goods sold 837,614 619,653
----------- -----------
Gross profit 1,018,197 1,291,318
----------- -----------
Operating expenses:
Research and development 294,045 462,335
Marketing and selling 110,882 1,122,802
General and administrative 668,342 1,005,226
Losses related to subsidiaries in liquidation -- 86,825
----------- -----------
Total operating expenses 1,073,269 2,677,188
----------- -----------
Loss from operations (55,072) (1,385,870)
----------- -----------
Other income (expenses):
Interest income 45,361 26,659
Interest expense (10,056) (16,526)
Other (7,095) 70,990
----------- -----------
Total other income 28,210 81,123
----------- -----------
Net loss (26,862) (1,304,747)
----------- -----------
Conversion discount on preferred stock -- 1,795,775
Preferred stock dividend requirements -- 18,750
Loss on retirement of preferred stock 764,668 --
----------- -----------
Loss attributable to common stockholders $ (791,530) $(3,119,272)
=========== ===========
Loss per common share (basic and diluted) $ (0.03) $ (0.14)
=========== ===========
Weighted average number of shares
outstanding during the period (basic and diluted) 25,394,727 22,948,354
=========== ===========
</TABLE>
See accompanying notes to the financial statements
4
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<TABLE>
NEOPROBE CORPORATION
STATEMENTS OF CASH FLOWS
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------
2000 1999
----------- ----------
<S> <C> <C>
Net cash used in operating activities $ (712,540) $(2,231,289)
Cash flows from investing activities:
Proceeds from sales of available-for-sale securities -- 443,729
Maturities of available-for-sale securities -- 4,467
Proceeds from sale of investment in affiliate 1,500,000 --
Purchases of property and equipment (12,055) (47,738)
Proceeds from sales of property and equipment 820 20,550
Patent costs (6,790) (12,436)
----------- ----------
Net cash provided by investing activities 1,481,975 408,572
----------- ----------
Cash flows from financing activities:
Proceeds from issuance of preferred stock and warrants,
net -- 2,810,573
Settlement of obligation to preferred stockholder (2,500,000) --
Proceeds from issuance of common stock, net 33,909 80
Payments under line of credit (380,000) --
Payments under notes payable (65,565) (79,580)
Payments under capital leases (25,347) (24,610)
----------- ----------
Net cash (used in) provided by financing activities (2,937,003) 2,706,463
----------- ----------
Effect of exchange rate changes on cash -- (4,853)
----------- ----------
Net (decrease) increase in cash and cash equivalents (2,167,568) 878,893
Cash and cash equivalents, beginning of period 4,882,537 1,061,936
----------- ----------
Cash and cash equivalents, end of period $ 2,714,969 $1,940,829
=========== ==========
</TABLE>
See accompanying notes to the financial statements
5
<PAGE> 6
1. BASIS OF PRESENTATION:
The information presented for March 31, 2000 and 1999, and for the
periods then ended is unaudited, but includes all adjustments (which
consist only of normal recurring adjustments) which the management of
Neoprobe Corporation (the "Company") 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, 1999, which were included as part of the
Company's Annual Report on Form 10-K. Certain 1999 amounts have been
reclassified to conform with the 2000 presentation.
2. COMPREHENSIVE INCOME (LOSS):
Due to the Company's net operating loss position, there are no income
tax effects on comprehensive income components for any of the periods
presented.
Other comprehensive income (loss) consists of the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000 MARCH 31, 1999
-------------- --------------
<S> <C> <C>
Net loss $ 26,862 $1,304,747
Foreign currency translation adjustment -- (983)
Gross unrealized gains on securities -- 219
-------- ----------
Other comprehensive loss $ 26,862 $1,303,983
======== ==========
</TABLE>
3. INVENTORY:
The components of inventory are as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
-------------- --------------
<S> <C> <C>
Materials and component parts $121,399 $ 104,441
Finished goods 367,265 1,029,986
-------- ----------
$488,664 $1,134,427
======== ==========
</TABLE>
4. EQUITY:
REDEEMABLE PREFERRED STOCK: During the first quarter of 1999, the
Company completed the private placement of 30,000 shares of 5% Series B
convertible preferred stock (the "Series B") for gross proceeds of $3
million ($2.8 million, net of certain placement costs), 2.9 million
Class L warrants to purchase common stock of the Company at an initial
exercise price of $1.03 per share, and issued Unit Purchase Options
("UPOs") entitling the placement agent to purchase approximately
150,000 shares of common stock in the Company.
On November 12, 1999, the Company entered into a binding letter of
intent to retire the 30,000 outstanding shares of Series B preferred
stock, the related 2.9 million Class L warrants and Unit Purchase
Options ("UPOs") and to cancel the financial advisory agreement with
the placement agent for the Series B. he letter of intent committed the
Series B holders to surrender the Series B shares and Class L warrants
and for
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the placement agent to surrender the UPOs and cancel the financial
advisory agreement as well as to grant the Company general releases
from potential litigation associated with the transaction. In exchange
for the retirement of the Series B preferred shares and surrendering
the Class L warrants and UPOs, the Company agreed to pay the Series B
holders a total of $2.5 million and issue the Series B holders 3
million shares of common stock and warrants to purchase 3 million
shares of common stock with an exercise price of $0.74 per share.
However, at December 31, 1999, final definitive agreements had not been
signed. Therefore, at December 31, 1999, the Company reclassified its
obligations to the Series B holders to reflect the $2.5 million payable
in cash as a current liability and the remaining book value of the
Series B, including dividends payable, as a long-term liability.
During January 2000, the Company executed a definitive settlement
agreement with terms consistent with the letter of intent, paid the
Series B holders the $2.5 million, and issued the related stock and
warrants. The transaction has been reported in the Company's first
quarter 2000 financial statements and was measured based on the market
price of the Company's common stock as of the execution of the
definitive agreement on January 20, 2000 (i.e., $0.59 per share). As a
result, the Company reflected a loss on the retirement of the preferred
shares of $765,000 (approximately $0.03 per share) below net income and
in its calculation of loss per share during the first quarter of 2000.
This amount represents the value of the cash given up plus the market
value of the stock issued and the estimated market value of the
warrants issued as valued on January 20, 2000 less the previously
recorded book value of the Series B preferred stock and warrants. In
addition, the long-term liability at December 31, 1999 was reclassified
during the first quarter of 2000 to additional paid-in capital as a
result of the definitive settlement.
B. STOCK OPTIONS: During the first quarter of 2000, the Board of
Directors granted options to employees and certain directors of the
Company for 690,000 shares of common stock, exercisable at $0.50 per
share, vesting over three years. As of March 31, 2000, the Company
has 2.3 million options outstanding under two stock option plans. Of
the outstanding options, 908,000 options have vested as of March 31,
2000, at an average exercise price of $5.49 per share.
C. RESTRICTED STOCK: On March 22, 2000, the Board of Directors
granted a total of 170,000 shares of restricted common stock to
officers of the Company under the 1996 Stock Incentive Plan. All of
the restricted shares granted vest on a change of control of the
Company as defined in the specific grant agreements. As a result,
the Company has not recorded any deferred compensation due to the
inability to assess the probability of the vesting event.
5. SEGMENTS AND SUBSIDIARIES INFORMATION:
A. SEGMENTS: The Company owns or has rights to intellectual property
involving three primary areas of cancer diagnosis and treatment
including: hand-held gamma detection instruments currently used
primarily in the application of Intraoperative Lymphatic Mapping
("ILM"), diagnostic radiopharmaceutical technology to be used in the
Company's proprietary RIGS process, and Activated Cellular Therapy
("ACT"). During 1998, the Company's business plan suspended ongoing
research activities related to RIGS and ACT to allow the Company to
focus primarily on the hand-held gamma detection instruments while
efforts are carried out to find partners or licensing parties to
fund future RIGS and ACT research and development. The Company
generated $50,000 in revenue during the first quarter of 2000 under
an option agreement to license its RIGS technology, but incurred no
RIGS-related expenses during that period. The Company did not
generate any revenue related to RIGS during the first quarter of
1999, but did incur $86,000 in overhead and interest expenses during
that period related to the RIGS segment. The Company had no revenue
or expenses in either the first quarter of 2000 or 1999 related to
its ACT initiative. All other revenue and costs included in the
Company's financial statements for the quarters ended March 31, 2000
and March 31, 1999 relate primarily to the Company's ILM initiative.
B. SUBSIDIARIES: The Company's suspended RIGS initiative included
the operations of the Company's two majority-owned international
subsidiaries, Neoprobe Europe and Neoprobe Israel. Neoprobe Europe
was acquired in 1993 primarily to perform a portion of the
manufacturing process of the monoclonal antibody used in the first
RIGS product to be used for colorectal cancer, RIGScan CR49.
Neoprobe
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Israel was founded to radiolabel RIGScan CR49. Neoprobe Europe and
Neoprobe Israel also both performed limited research and development
activities related to the Company's RIGS process on behalf of the
U.S. parent company. Under SFAS No. 131, neither subsidiary is
considered a segment. During 1998, the Company initiated steps to
liquidate both Neoprobe Europe and Neoprobe Israel as a result of
the suspension of RIGS research and development activities. At
December 31, 1999, both subsidiaries were deconsolidated due to
statutory liquidation or receivership activities then underway.
6. AGREEMENTS:
A. PLEXUS MANUFACTURING AND SUPPLY AGREEMENT: In March 2000, the
Company entered into a manufacturing and supply agreement with
Plexus for the exclusive manufacture of the Company's 14mm probe
and neo2000 control unit. The original term of the agreement
expires on December 31, 2003 but may be extended for an additional
year given six months notice prior to December 31, 2003. The
Company has the right to terminate the agreement upon six months
written notice. The agreement may be terminated by either party in
the event of material breach or insolvency, or by the Company in
the event of failure to supply. The Company may also have the
covered product manufactured by other suppliers in the event of
failure to supply or if the Company is able to secure another
source of supply with significantly more favorable pricing terms
than those offered by Plexus. The agreement calls for the Company
to deliver rolling 12-month product forecasts to Plexus and to
place purchase orders 60 days prior to requested delivery in
accordance with the forecast. In the event the agreement is
terminated by Neoprobe or if Plexus ceases to be the exclusive
supplier of the covered products, the Company is required to
purchase all finished components on hand at Plexus plus raw
materials not able to be restocked with suppliers.
C. NURIGS OPTION AGREEMENT: During the first quarter of 2000, the
Company entered into a multi-step option agreement for the
development of its initial RIGS compound, RIGScan CR. The Company
recognized $50,000 in revenue related to the conclusion of the first
step of the option agreement. The option agreement is with a
newly-formed development entity, NuRigs, Ltd. ("NuRigs"). Based in
Tel Aviv, Israel, NuRigs has been organized for the express purpose
of developing a second-generation humanized RIGScan CR antibody
fragment. The option agreement calls for Neoprobe to receive, with
the execution of a definitive agreement, a license fee of $900,000
and a product royalty of approximately 5 percent on NuRigs'
commercial sales of the product. The Company and NuRigs are
negotiating a definitive license agreement that is expected to be
completed in the fourth quarter of 2000, at the earliest. However,
there can be no assurance that a definitive license agreement will
be completed, on terms consistent with the option agreement, or at
all. Under the terms of the option, NuRigs will assume all clinical
and other development costs for RIGScan CR. NuRigs expects to begin
clinical evaluation of the second-generation RIGScan CR agent during
the second quarter of 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The statements contained in this Management Discussion and Analysis of Financial
Condition and Results of Operations and other parts of this Report that are not
purely historical or which might be considered an opinion or projection
concerning the Company or its business, whether express or implied, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements may include statements regarding
the Company's expectations, intentions, plans or strategies regarding the future
which involve risks and uncertainties. All forward-looking statements included
in this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward looking
statements. It is important to note that the Company's actual results in 2000
and future periods may differ significantly from the prospects discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, limited revenues, continuing net
losses, accumulated deficit, future capital needs, uncertainty of capital
funding, dependence on exclusive distributor, competition, limited marketing
experience, limited manufacturing experience, dependence on principal product
line, uncertainty of market acceptance, patents, proprietary technology and
trade secrets, government regulation, risk of technological obsolescence,
limited third party reimbursement, product liability, need to manage a changing
business, possible volatility of stock, anti-takeover provisions, dependence on
key personnel, and no dividends.
8
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LIQUIDITY AND CAPITAL RESOURCES
Operating Activities. Through March 31, 2000, the Company's activities have
resulted in an accumulated deficit of $120 million. Substantially all of the
Company's efforts and resources through early 1999 were devoted to research and
clinical development of innovative systems for the intraoperative diagnosis and
treatment of cancers. To date, the Company's activities have been financed
primarily through the public and private sale of equity securities. Prior to
1999, the Company's research and development efforts were principally related to
the Company's proprietary RIGS system. Efforts since early 1997 have also
included activities related to development of the Company's ACT process and ILM
products. Beginning in the first half of 1998, due primarily to feedback
received from regulatory authorities in the U.S. and Europe related to the
Company's applications for marketing approval for its RIGScan CR49 product, the
Company began a series of changes to its business plan. Since that time, the
Company has continued to modify its business plan to one that is primarily
focused on the continued development of the Company's ILM business. During 1999,
the Company continued the operating expense reduction efforts started in 1998
and has nearly eliminated non-ILM-related research and development activities.
To further support the Company's goal of achieving operating profitability, the
Company entered into a multi-year distribution agreement with EES, a subsidiary
of Johnson & Johnson, effective October 1, 1999. As a result of entering the
agreement, the Company achieved its first quarter of operating profitability
during the fourth quarter of 1999. The Company expects to continue to achieve
operating profitability on an annual basis for 2000; however, the Company
anticipates there may be quarterly variations in profitability, such as occurred
in the first quarter of 2000, due to the timing of purchases by EES. There can
be no assurances that the Company will achieve the volume of sales anticipated
in connection with the agreement, or if achieved, that the margin on such sales
will be adequate to achieve operating profitability in the near term, or at all.
During the first quarter of 2000, the Company entered into a multi-step option
agreement for the development of its initial RIGS compound, RIGScan CR. The
Company recognized $50,000 in revenue related to the conclusion of the first
step of the option agreement. The option agreement is with a newly-formed
development entity, NuRigs, Ltd. ("NuRigs"). Based in Tel Aviv, Israel, NuRigs
has been organized for the express purpose of developing a second-generation
humanized RIGScan CR antibody fragment. The option agreement calls for Neoprobe
to receive, with the execution of a definitive agreement, a license fee of
$900,000 and a product royalty of approximately 5 percent on NuRigs' commercial
sales of the product. The Company and NuRigs are negotiating a definitive
license agreement that is expected to be completed in the fourth quarter of
2000, at the earliest. However, there can be no assurance that a definitive
license agreement will be completed, on terms consistent with the option
agreement, or at all. Under the terms of the option, NuRigs will assume all
clinical and other development costs for RIGScan CR. NuRigs expects to begin
clinical evaluation of the second-generation RIGScan CR agent during the second
quarter of 2000.
Accounts receivable increased significantly at March 31, 2000 from December 31,
1999 due primarily to the timing of sales to EES during the first quarter of
2000 versus the fourth quarter of 1999. Inventory levels declined at March 31,
2000 as compared to December 31, 1999. This is primarily due to the purchase by
EES of $600,000 of demonstrator units the Company had repurchased from KOL
BioMedical Instruments, Inc. in accordance with the termination of the marketing
agreement. The Company expects receivable levels to fluctuate in 2000 depending
on the timing of purchases by EES; however, inventory is expected to remain
relatively constant or decrease slightly over time as the strategic relationship
progresses and the Company manages its production and sales to meet EES's
forecasted needs.
Investing Activities. The Company's investing activities during the first
quarter of 2000 involved primarily the sale of its equity interest in XTL
Biopharmaceuticals Ltd. ("XTL") for $1.5 million. The Company's investing
activities during the first quarter of 1999 involved primarily the sale of
certain available-for-sale securities to fund operations.
Financing Activities. On February 16, 1999, the Company executed a Purchase
Agreement (the "Purchase Agreement") to complete the private placement of 30,000
shares of 5% Series B convertible preferred stock (the "Series B") for gross
proceeds of $3 million ($2.8 million, net). The Series B were issued with a $100
per share stated value and were convertible into common stock of the Company. In
connection with the private placement, the Company also issued 2.9 million Class
L warrants to purchase common stock of the Company at an initial
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exercise price of $1.03 per share. The Series B paid a 5% annual dividend
payable in cash or common stock. The Series B were convertible at variable
prices based on the market price of the Company's common stock, subject to a
conversion price floor of $0.55. The Class L warrants were also subject to
variable exercise prices, subject to an exercise price floor of $0.62. Holders
of the Series B had certain liquidation preferences over other shareholders
under certain provisions as defined in the Purchase Agreement and had the right
to cast the same number of votes as if the owner had converted on the record
date. Pursuant to the private placement, the Company entered into a financial
advisory agreement with the placement agent providing the agent with Unit
Purchase Options ("UPOs") entitling the placement agent to purchase
approximately 150,000 shares of common stock in the Company. Under certain
conditions, the Company would have been obligated to redeem outstanding shares
of Series B for $120 per share (i.e., a total of $3.6 million ) such as the
delisting of the Company's common stock from the Nasdaq Stock Market as occurred
on July 27, 1999 and other conditions outlined in the Purchase Agreement.
The Series B were recorded by the Company during the first quarter of 1999 at
the amount of gross proceeds less the costs of the financing and the fair value
of the warrants and classified as mezzanine financing above the stockholders'
equity section on the Company's interim balance sheets for 1999. The calculated
conversion price at February 16, 1999, the first available conversion date, was
$1.03 per share. In accordance with the FASB's Emerging Issues Task Force Topic
D-60, the difference between the initial conversion price and the closing market
price on February 16, 1999 of $1.81 resulted in an implied incremental yield to
Series B holders of approximately $1.8 million that is reflected as conversion
discount in the Company's loss per share calculation for the first quarter of
1999.
On November 12, 1999, the Company entered into a binding letter of intent to
retire the 30,000 outstanding shares of Series B preferred stock, the related
2.9 million Class L warrants and the Unit Purchase Options ("UPOs") and to
cancel the financial advisory agreement with the placement agent for the Series
B. The letter of intent committed the Series B holders to surrender the Series B
shares and Class L warrants and for the placement agent to surrender the UPOs
and cancel the financial advisory agreement as well as to grant the Company
general releases from potential litigation associated with the transaction. In
exchange for the retirement of the Series B preferred shares and surrendering
the Class L warrants and UPOs, the Company agreed to pay the Series B holders a
total of $2.5 million and issue the Series B holders 3 million shares of common
stock and 3 million warrants to purchase common stock with an exercise price of
$0.74 per share. However, at December 31, 1999, final definitive agreements had
not been signed. Therefore, at December 31, 1999, the Company reclassified its
obligations to the Series B holders to reflect the $2.5 million payable in cash
as a current liability and the remaining book value of the Series B, including
dividends payable, as a long-term liability. In January 2000, the Company
executed a definitive settlement agreement with terms consistent with the letter
of intent, paid the Series B holders the $2.5 million, and issued the related
stock and warrants. The Company reported a loss on the retirement of the
preferred shares of $ 765,000 (approximately $0.03 per share) below net income
during the first quarter of 2000. This amount represents the value of the cash
given up plus the market value of the stock and warrants issued as valued on
January 20, 2000 less the previously recorded book value of the Series B
preferred stock and warrants.
Operational Outlook. The Company's only approved products are instruments and
related products used in gamma guided surgery. The Company does not currently
have a RIGS drug or ACT product approved for commercial sale in any major
market. The Company entered into a distribution agreement (the "Agreement") with
EES effective October 1, 1999, for an initial five-year term with options to
extend for two successive two-year terms. Under the Agreement, the Company will
manufacture and sell its ILM products (the "Products") exclusively to EES who
will distribute the Products globally. EES agreed to purchase minimum quantities
of the Company's Products over the first three years of the term of the
Agreement and to reimburse the Company for certain research and development
costs and a portion of the Company's warranty costs. The Company is obligated to
continue certain product maintenance activities and to provide ongoing
regulatory support for the Products. As a result of entering the Agreement, the
Company expects to achieve operating profitability on an annual basis in the
near term. However, there can be no assurances that the Company will achieve the
volume of sales anticipated in connection with the Agreement, or if achieved,
that the margin on such sales will be adequate to achieve operating
profitability on either an interim or annual basis in the near term, or at all.
Under the Agreement, EES received a worldwide paid-up license (the "License") to
the Company's ILM intellectual property to make and sell other products that may
be developed using the Company's ILM intellectual property. The term of the
License is the same as that of the Agreement. EES paid the Company a
non-refundable license fee
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of $4 million. The Company intends to recognize the license fee as revenue
ratably over the five-year initial term of the Agreement. If the Agreement is
terminated by the Company as a result of a material breach by EES, EES would be
required to pay the Company a royalty on all products developed and sold by EES
using the Company's ILM intellectual property. In addition, the Company is
entitled to a royalty on any ILM product commercialized by EES that does not
infringe any of the Company's existing intellectual property.
During 1998, the Company began revising its business plan to focus on its ILM
technology and essentially suspended activities related to its RIGS and ACT
initiatives pending identification of a developing partner. The Company has
entered into a multi-step option agreement with a party interested in
commercializing a second-generation antibody for use in colorectal cancer
surgery. At this time, the Company has not reached definitive agreement with the
option party that would ensure the continued development of the RIGS process. In
addition, should the option party ultimately decide to exercise its license
option and reach an agreement satisfactory to the Company, the Company believes
that the likely timeframe required for the continued development, regulatory and
commercialization of a RIGS product would take a minimum of four to five years
before the Company would receive any significant product-related royalties.
However, there can be no assurance that the Company will be able to complete
definitive license agreements with the option partner for the RIGS technology,
on terms acceptable to the Company, or at all. To date, a partner for ACT has
not been identified or secured. Until definitive agreements with development
partners are reached and the appropriate regulatory approvals are received, the
Company is limited in its ability to generate revenue from RIGS or ACT. The
Company therefore intends to continue to focus on further development of the ILM
market in conjunction with its distribution partner, EES.
As of March 31, 2000, the Company had cash and cash equivalents of $2.7 million.
The Company expects to generate positive cash flow from operations in the near
term as a result of the Agreement with EES. However, there can be no assurances
that the Company will achieve the volume of sales anticipated in connection with
the Agreement, or if achieved that the margin on such sales will be adequate to
produce positive operating cash flow. The Company expects to continue to
experience cost savings during 2000 as a result of the transfer of marketing
responsibilities for the Company's ILM products to EES. In January 2000, the
Company sold its investment in XTL for $1.5 million. The Company believes its
March 31, 2000 cash balances and sources of future cash flow are adequate for
the Company to continue operating for the foreseeable future. However, if the
Company does not receive adequate funds from operations, it may need to further
modify its business plan and seek other financing alternatives. Such
alternatives may include asset dispositions that could force the Company to
further change its business plan.
The Company has, from time to time, been approached by entities interested in
acquiring some or all of the assets of the Company. The Company has, as
appropriate, engaged in discussions with certain of these entities; however,
such discussions to this point have been only preliminary in nature and none has
resulted in a definitive transaction for further consideration. The Company
anticipates that it may continue to be approached by such entities. At such time
as a definitive transaction is proposed, if any, it will be considered by
management and the Board of Directors, and if necessary, referred to the
shareholders of the Company for their consideration. However, there can be no
assurances that such a transaction will be proposed, or if proposed, that the
terms would be acceptable to the Company or its shareholders.
At December 31, 1999, the Company had U.S. net operating tax loss carryforwards
and tax credit carryforwards of approximately $93.3 million and $4.9 million,
respectively, available to offset or reduce future income tax liability, if any,
through 2019. However, under Sections 382 and 383 of the Internal Revenue Code
of 1986, as amended, use of prior tax loss and credit carryforwards may be
limited after an ownership change. As a result of ownership changes as defined
by Sections 382 and 383, which have occurred at various points in the Company's
history, management believes utilization of the Company's tax loss carryforwards
and tax credit carryforwards may be limited. The Company's international
subsidiaries also have net operating tax loss carryforwards in their respective
foreign jurisdictions. However, as the Company is in the process of liquidating
its interests in both foreign subsidiaries as of March 31, 2000, the Company
does not anticipate that the foreign loss carryforwards will ever be utilized.
Impact of Recent Accounting Pronouncements. In June 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities.
SFAS No. 133 was originally required to be adopted in years beginning after June
15, 1999;
11
<PAGE> 12
however, SFAS No. 137 deferred the effective date to fiscal quarters beginning
after June 15, 2000. The Company expects to adopt SFAS No. 133 effective July 1,
2000. The Statement will require companies to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If a derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of the derivative will either be offset
against the change in fair value of the hedge asset, liability or firm
commitment through earnings, or recognized in other comprehensive income until
the hedge item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Company does not anticipate that the adoption of this Statement will have a
significant effect on its results of operations or financial position.
On December 3, 1999, the SEC staff issued Staff Accounting Bulletin No. 101,
Revenue Recognition in Financial Statements (SAB 101). SAB 101 was also amended
by SAB 101A. SAB 101 and SAB 101A summarize certain of the staff's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. SAB 101 adds new major Topic 13, "Revenue Recognition" and
Topic 13:A, "Views on Selected Revenue Recognition Issues" to the Staff
Accounting Bulletin Series. The Company expects to adopt SAB 101 during the
second quarter of 2000. Management is currently evaluating the potential impact,
if any, that the adoption of this SAB will have on its results of operations or
financial position.
RESULTS OF OPERATIONS
Revenue for the first quarter of 2000 was $1.9 million consistent with the $1.9
million for the same period in 1999. Research and development expenses during
the first quarter of 2000 were $294,000 or 27% of operating expenses for the
quarter. Marketing and selling expenses were $111,000 or 10% of operating
expenses during the quarter, and general and administrative expenses were
$668,000 or 62% of operating expenses for the quarter. Overall, operating
expenses for the first quarter of 2000 decreased $1.6 million or 60% over the
same quarter in 1999. The Company anticipates that total operating expenses for
the remainder of 2000 will also decrease over 1999 levels. The Company expects
research and development and general and administrative expenses to decrease
from 1999 levels as a result of cost containment measures implemented during
1999. Marketing expenses, as a percentage of sales, decreased to 7% of sales for
the first quarter of 2000 from 59% of sales for the same period in 1999. The
Company expects marketing and selling expenses for the remainder of 2000 to
decrease from 1999 levels.
Three months ended March 31, 2000 and 1999
Revenues and Margins. Net product sales decreased $305,000 or 16% to $1.6
million during the first quarter of 2000 from $1.9 million during the same
period in 1999. Sales during both periods were comprised almost entirely of
sales of the Company's hand-held gamma detection instruments. Gross margins
decreased to 48% of net sales for the first quarter of 2000 from 68% of net
sales for the same period in 1999. The decrease in instrument sales and gross
margins is primarily the result of the change in the type of sales made by the
Company related to entering the distribution agreement with EES at the end of
September 1999. Under the terms of this agreement, the Company's instrument
products are sold to EES at a wholesale transfer price. Prior to entering the
EES agreement, the Company sold its instrument products directly to end
customers at retail prices during the first quarter of 1999. The cost to
manufacture the Company's products did not change significantly from 1999 to
2000. The effect of the decrease in gross margins on profitability is offset by
the decline in marketing expenses discussed below. Revenues in the first quarter
of 2000 also included $200,000 from the pro-rata recognition of license fees
related to the distribution agreement with EES and $50,000 from the recognition
of option fees related to an option agreement to license certain of the
Company's RIGS products.
Research and Development Expenses. Research and development expenses decreased
$168,000 or 36% to $294,000 during the first quarter of 2000 from $462,000
during the same period in 1999. The decrease is primarily due to the
reimbursement of certain research and development expenses associated with the
Company's distribution agreement with EES. First quarter research and
development expenses included approximately $40,000 in non-recurring severance
costs and $150,000 in unreimbursed costs for development of products to be
launched in fiscal year 2000.
Marketing and Selling Expenses. Marketing and selling expenses decreased $1.0
million or 90% to $111,000 during the first quarter of 2000 from $1.1 million
during the same period in 1999. Marketing and selling expenses, as a percentage
of sales, decreased to 7% of sales for the first quarter of 2000 from 59% of
sales for the same period in 1999. These results reflect lower internal
marketing headcount and out-of-pocket expense levels during the first quarter of
2000 as compared to the same period in 1999 as well as elimination of marketing
partner commissions over the same periods, due to entering the distribution
agreement with EES. The first quarter of 2000 also included approximately
$40,000 in non-recurring severance charges related to the separation of
marketing personnel.
General and Administrative Expenses. General and administrative expenses
decreased $337,000 or 34% to $668,000 during the first quarter of 2000 from $1.0
million during the same period in 1999. The decrease was primarily a result of
reductions in overhead costs such as space costs, taxes and insurance.
12
<PAGE> 13
Losses Related to Subsidiaries in Liquidation. The Company incurred certain
charges during the first quarter of 1999 related to interest and other overhead
costs incurred during the wind-down process of subsidiaries in liquidation. No
such charges were incurred in the first quarter of 2000.
Other Income. Other income decreased $53,000 or 65% to $28,000 during the first
quarter of 2000 from $81,000 during the same period in 1999. Other income during
the first quarter of 2000 consisted primarily of interest income. Other income
during the first quarter of 1999 consisted primarily of gains from settlement of
liabilities at less than their face value. The Company's interest income
increased due to overall average levels of cash and investments during the first
quarter of 2000 as compared to the same period in 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not currently use derivative financial instruments, such as
interest rate swaps, to manage its exposure to changes in interest rates for its
debt instruments or investment securities. As of March 31, 2000 and December 31,
1999, the Company had outstanding debt instruments of $320,000 and $790,000,
respectively. Outstanding debt consisted primarily of a variable rate line of
credit and fixed rate financing instruments, with average interest rates of 6%
and 8% at March 31, 2000 and December 31, 1999, respectively. At March 31, 2000
and December 31, 1999, the fair market values of the Company's debt instruments
approximated their carrying values. A hypothetical 100-basis point change in
interest rates would not have a material effect on cash flows, income or market
values.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
On February 16, 1999, the Registrant executed a purchase agreement to complete
the private placement of 30,000 shares of 5% Series B redeemable convertible
preferred stock (the "Series B"). The Series B were issued with a $100 per share
stated value and were convertible into common stock of the Registrant at the
option of the Series B holders. In connection with the private placement, the
Registrant also issued 2.9 million Class L warrants to purchase common stock of
the Registrant at an initial exercise price of $1.03 per share and the
Registrant entered into a financial advisory agreement with the placement agent
providing the agent with Unit Purchase Option ("UPOs") entitling the placement
agent to purchase approximately 150,000 shares of common stock in the
Registrant.
On January 20, 2000, the Registrant executed a definitive Settlement Agreement
with the Series B holders to retire the 30,000 shares of Series B preferred
stock issued in February 1999. In addition to retiring the preferred shares, the
Series B holders returned the Class L warrants issued in connection with the
Series B and the placement agent returned the UPOs. In exchange for the
retirement of the Series B preferred shares and surrendering the Class L
warrants and UPOs, the Registrant paid the Series B holders $2.5 million and
issued to the Series B Holders 3 million shares of common stock of the
Registrant and 3 million warrants to purchase common stock of the Registrant
with an exercise price of$0.74 per share.
On May 9, 2000 the Registrant filed a Certificate of Elimination with the
Secretary of State of the State of Delaware to remove all reference to the
Series B from the Registrant's Restated Certificate of Incorporation.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) LIST OF EXHIBITS
3. ARTICLES OF INCORPORATION AND BY-LAWS
Exhibit 3.1
Complete Restated Certificate of Incorporation of Neoprobe
Corporation, as corrected February 18, 1994 and as amended
June 27, 1994, July 25, 1995, June 3, 1996, March 17, 1999 and
May 9, 2000.
Page 21 in the manually signed original.
Exhibit 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. 0-26520).
Exhibit 3.3
Certificate of Elimination of Neoprobe Corporation filed on
May 9, 2000 with the Secretary of State of Delaware.
Page 31 in the manually signed original
14
<PAGE> 15
4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES
Exhibit 4.1
See Articles FOUR, FIVE, SIX and SEVEN of the Restated
Certificate of Incorporation of the Registrant (see Exhibit
3.1).
Exhibit 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).
Exhibit 4.3
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. 0-26520).
Exhibit 4.4
Amendment Number 1 to the Rights Agreement between the
Registrant and Continental Stock Transfer and Trust Company
dated February 16, 1999 (incorporated by reference to Exhibit
4.4 of the 1998 Form 10-K/A).
10. MATERIAL CONTRACTS
Exhibit 10.1.39
Settlement Agreement among the Registrant, The Aries Master
Fund, The Aries Domestic Fund, L.P., Paramount Capital, Inc.
and Paramount Capital Asset Management, Inc. dated January 20,
2000.
Page 32 in the manually signed original.
Exhibit 10.1.40
Option Agreement between the Registrant and Reico Ltd. dated
February 1, 2000.
Page 67 in the manually signed original.
Exhibit 10.2.53
Non-Qualified Stock Option Agreement dated January 4, 2000
between the Registrant and David C. Bupp. This agreement is
one of three substantially identical agreements and is
accompanied by a schedule identifying the other agreements
omitted and setting forth the material details in which such
documents differ from the one that is filed herewith.
Page 76 in the manually signed original.
Exhibit 10.2.54
Restricted Stock Agreement dated March 22, 2000 between the
Registrant and David C. Bupp. This agreement is one of three
substantially identical agreements and is accompanied by a
schedule identifying the other agreements omitted and setting
forth the material details in which such documents differ from
the one that is filed herewith.
15
<PAGE> 16
Page 80 in the manually signed original.
Exhibit 10.2.55
Agreement, Release and Waiver between the Registrant and
Matthew F. Bowman dated March 31, 2000.
Page 84 in the manually signed original.
Exhibit 10.2.56
Employment Agreement between the Registrant and Carl Bosch
dated April 1, 2000.
Page 90 in the manually signed original.
Exhibit 10.2.57
Employment Agreement between the Registrant and Brent L.
Larson dated April 1, 2000.
Page 95 in the manually signed original.
Exhibit 10.3.50
Share Purchase Agreement between the Registrant and Biomedical
Investments (1997) Ltd. dated January 19, 2000.
Page 100 in the manually signed original.
Exhibit 10.4.45
Manufacturing and Supply Agreement between the Registrant and
Plexus Corp. dated March 30, 2000 (filed pursuant to Rule
24b-2 under which the Registrant has requested confidential
treatment of certain portions of this Exhibit).
Page 112 in the manually signed original.
11. STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Exhibit 11.1
Computation of Net Loss Per Share.
Page 134 in the manually signed original.
27. FINANCIAL DATA SCHEDULE
Exhibit 27.1
Financial Data Schedule (submitted electronically for SEC
information only).
16
<PAGE> 17
(b) REPORTS ON FORM 8-K.
The Registrant filed a Current Report on Form 8-K on February
1, 2000 reporting the Registrant's disposition of its equity
investment in XTL Biopharmaceuticals Ltd. on January 19, 2000.
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
(the "Registrant")
Dated: May 12, 2000
By: /s/ David C. Bupp
-----------------------
David C. Bupp,
President and Chief Executive Officer
(duly authorized officer; principal
executive officer)
By: /s/ Brent Larson
-----------------------
Brent Larson
Vice President, Finance and Administration
(principal financial and accounting officer)
17
<PAGE> 18
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
NEOPROBE CORPORATION
------------------------
FORM 10-QSB QUARTERLY REPORT
FOR THE FISCAL QUARTER ENDED:
MARCH 31, 2000
------------------------
EXHIBITS
------------------------
<PAGE> 19
INDEX
Exhibit 3.1
Complete Restated Certificate of Incorporation of Neoprobe
Corporation, as corrected February 18, 1994 and as amended
June 27, 1994, July 25, 1995, June 3, 1996, March 17, 1999 and
May 9, 2000.
Exhibit 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. 0-26520).
Exhibit 3.3
Certificate of Elimination of Neoprobe Corporation filed on
May 9, 2000 with the Secretary of State of the State of
Delaware.
Exhibit 4.1
See Articles FOUR, FIVE, SIX and SEVEN of the Restated
Certificate of Incorporation of the Registrant (see Exhibit
3.1).
Exhibit 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).
Exhibit 4.3
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. 0-26520).
Exhibit 4.4
Amendment Number 1 to the Rights Agreement between the
Registrant and Continental Stock Transfer and Trust Company
dated February 16, 1999 (incorporated by reference to Exhibit
4.4 of the 1998 Form 10-K/A).
Exhibit 10.1.39
Settlement Agreement among the Registrant, The Aries Master
Fund, The Aries Domestic Fund, L.P., Paramount Capital, Inc.,
and Paramount Capital Asset Management, Inc. dated January 20,
2000.
Exhibit 10.1.40
Option Agreement between the Registrant and Reico Ltd. dated
February 1, 2000.
Exhibit 10.2.53
Non-Qualified Stock Option Agreement between the Registrant
and David C. Bupp dated January 4, 2000. This Agreement is one
of three substantially identical agreements and is accompanied
by a schedule identifying the other agreements omitted and
setting forth the material details in which such agreements
differ from the one that is filed herewith.
Exhibit 10.2.54
Restricted Stock Agreement dated March 22, 2000 between the
Registrant and David C. Bupp. This Agreement is one of three
substantially identical agreements and is accompanied by a
schedule identifying the other agreements omitted and setting
forth the material details in which such agreements differ
from the one that is filed herewith.
Exhibit 10.2.55
Agreement, Release and Waiver between the Registrant and
Matthew F. Bowman dated March 31, 2000.
<PAGE> 20
Exhibit 10.2.56
Employment Agreement between the Registrant and Carl Bosch
dated April 1, 2000.
Exhibit 10.2.57
Employment Agreement between the Registrant and Brent L.
Larson dated April 1, 2000.
Exhibit 10.3.50
Share Purchase Agreement between the Registrant and Biomedical
Investments (1997) Ltd. dated January 19, 2000.
Exhibit 10.4.45
Manufacturing and Supply Agreement between the Registrant and
Plexus Corp. dated March 30, 2000 (filed pursuant to Rule
24b-2 under which the Registrant has requested confidential
treatment of certain portions of this Exhibit).
Exhibit 11.1
Computation of Net Loss Per Share.
Exhibit 27.1
Financial Data Schedule (submitted electronically for SEC
information only).
<PAGE> 1
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
NEOPROBE CORPORATION
(as corrected February 18, 1994 and
as amended June 27, 1994, July 25, 1995, June 3, 1996, March 17, 1999 and
May 9, 2000)
ARTICLE ONE
-----------
The name of the corporation is Neoprobe Corporation.
ARTICLE TWO
-----------
The address of the corporation's registered office in the State of Delaware
is the Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is the
Corporation Trust Company.
ARTICLE THREE
-------------
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
(Article Four was amended to increase the total number of shares authorized
to be outstanding from 22,000,000 to 55,000,000 , the total number of shares of
Common Stock from 20,000,000 to 50,000,000 and the total number of shares of
Preferred Stock from 2,000,000 to 5,000,000 by a resolution duly adopted by the
Board of Directors on March 3, 1994 and duly adopted by the stockholders on May
26, 1994).
ARTICLE FOUR
------------
4.1 AUTHORIZED SHARES. The total number of shares of capital stock which
the Corporation has authority to issue is 55,000,000 shares, consisting of:
(a) 50,000,000 shares of Common Stock, par value $.001 per share (the
"Common Stock");
(b) 5,000,000 shares of Preferred Stock, par value $.001 per share (the
"Preferred Stock").
4.2 COMMON STOCK.
(a) Subject to such voting rights of any other class or series of
securities as may be granted from time to time pursuant to this certificate of
incorporation, any amendment thereto, or the provisions of the laws of the State
of Delaware governing corporations, voting rights shall be vested exclusively in
the holders of Common Stock. Each holder of Common Stock shall have one vote in
respect of each share of such stock held.
- 1 -
<PAGE> 2
(b) Subject to the rights of any other class or series of stock, the
holders of shares of Common Stock shall be entitled to receive, when and as
declared by the board of directors, out of the assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
board of directors.
(c) Subject to such rights of any other class or series of securities as
may be granted from time to time, the holders of shares of Common Stock shall be
entitled to receive all the assets of the Corporation available for distribution
to shareholders in the event of the voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, ratably, in proportion to the
number of shares of Common Stock held by them. Neither the merger or
consolidation of the Corporation into or with any other corporation, nor the
merger or consolidation of any other corporation into or with the Corporation,
nor the sale, lease, exchange or other disposition (for cash, shares of stock,
securities, or other consideration) of all or substantially all the assets of
the Corporation, shall be deemed to be a dissolution, liquidation, or winding
up, voluntary or involuntary, of the Corporation.
4.3 PREFERRED STOCK. Shares of Preferred Stock may be issued from time to
time in one or more series. The board of directors of the Corporation is hereby
authorized to determine and alter all rights, preferences, and privileges and
qualifications, limitations, and restrictions thereof (including, without
limitation, voting rights and the limitation and exclusion thereof) granted to
or imposed upon any wholly unissued series of Preferred Stock and the number of
shares constituting any such series and the designation thereof, and to increase
or decrease (but not below the number of shares of such series then outstanding)
the number of shares of any series subsequent to the issue of shares of that
series then outstanding. In case the number of shares of any series is so
decreased, the shares constituting such reduction shall resume the status which
such shares had prior to the adoption of the resolution originally fixing the
number of shares of such series.
ARTICLE FIVE
------------
The business and affairs of the Corporation shall be managed by or under
the direction of the board of directors, and the directors need not be elected
by ballot unless required by the by-laws of the Corporation. In furtherance and
not in limitation of the powers conferred by statute, the board of directors of
the Corporation is expressly authorized to adopt, amend, or repeal the by-laws
of the Corporation.
ARTICLE SIX
-----------
Action shall be taken by the stockholders of the Corporation only at annual
or special meetings of stockholders, and stockholders may not act by written
consent. Special meetings of the Corporation may be called only as provided in
the by-laws.
ARTICLE SEVEN
-------------
Meetings of the stockholders may be held within or without the State of
Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the Corporation. The board of directors shall from time to time decide
whether and to what extent and at what times and under what conditions and
requirements the accounts and books of the Corporation, or any of them, except
the stock book, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any books or documents of the
Corporation except as conferred by the laws of the State of Delaware or as
authorized by the board of directors.
- 2 -
<PAGE> 3
(Article Eight was amended in its entirety by a resolution duly adopted by
the Board of Directors on January 18, 1996 and duly adopted by the stockholders
at the Annual Meeting of Stockholders held on May 30, 1996).
ARTICLE EIGHT
-------------
Notwithstanding any other provision set forth in the Certificate of
Incorporation of the Corporation or its By-laws, the board of directors shall be
divided into three classes; the term of office of those of the first class to
expire at the annual meeting next ensuing; of the second class one year
thereafter; of the third class two years thereafter; and at each annual election
held after the initial classification of the board of directors and election of
directors to such classes, directors shall be chosen for a full term of three
years, as the case may be, to succeed those whose terms expire. The total number
of directors constituting the full board of directors and the number of
directors in each class shall be fixed by, or in the manner provided in the
by-laws, but the total number of directors shall not exceed seventeen (17) nor
shall the number of directors in any class exceed six (6). Subject to the
foregoing, the classes of directors need not have the same number of members. No
reduction in the total number of directors or in the number of directors in any
class shall be effective to remove any director or to reduce the term of any
director. If the board of directors increases the number of directors in a
class, it may fill the vacancy created thereby for the full remaining term of a
director in that class even though such term may extend beyond the next annual
election. The board of directors may fill any vacancy occurring for any other
reason for the full remaining term of the director whose death, resignation or
removal caused the vacancy, even though such term may extend beyond the next
annual election.
ARTICLE NINE
------------
(a) The Corporation shall, to the fullest extent permitted by the General
Corporation Law of the State of Delaware as the same exists or may hereafter be
amended, indemnify all persons whom it may indemnify pursuant hereto.
(b) To the fullest extent permitted by the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended, a director of
this Corporation shall not be personally liable for the Corporation or its
Stockholders for monetary damages for breach of fiduciary duty as a director.
The modification or repeal of this Article Nine shall not affect the restriction
hereunder of a director's personal liability for any breach, act, or omission
occurring prior to such modification or repeal.
ARTICLE TEN
-----------
The Corporation is to have perpetual existence.
* * *
(A Certificate of Correction was filed to correct a failure to set forth in
the Restated Certificate of Incorporation filed with the Secretary of State of
Delaware on November 9, 1992, the following resolutions duly adopted by the
Board and duly approved by the stockholders):
WHEREAS, the Board of Directors of the Corporation deems it to be advisable
and in the best interests of the Corporation that the Corporation effectuates a
reverse split of its common stock, par value $0.001 per share (the "Common
Stock"), to cause the total number of issued and outstanding shares of Common
Stock to be 5,162,762 prior to a contemplated public offering of the securities
of the Corporation; it is therefore:
RESOLVED, that, subject to approval by the Corporation's stockholders,
there is hereby declared a one-for-two reverse split of the issued and
outstanding shares of Common Stock, effective immediately prior to the effective
time
- 3 -
<PAGE> 4
of the contemplated public offering (the "Conversion Time"), pursuant to which
each issued and outstanding share of Common Stock shall automatically be
converted into one-half of the one share of Common Stock, and each stockholder
of record at the Conversion Time shall receive one or more certificates
representing the number of fully-paid and nonassessable shares of Common Stock
equal to the number of shares held after the Conversion Time as a result of the
foregoing reverse split;
RESOLVED, FURTHER, that the shares of Common Stock that cease to be
outstanding as a result of the reverse stock split shall be authorized but
unissued shares;
RESOLVED, FURTHER, that fractions of a share existing after the reverse
stock split shall not be issued to the stockholders, and that such fractions
shall be paid in cash at their pro rata fair value, which the Board of Directors
hereby determines, after due consideration, to be $6.00 per share as of the
Conversion Time;
RESOLVED, FURTHER, that appropriate adjustment shall be made to the
applicable conversion or other ratios of the Corporation's outstanding warrants,
options or other convertible securities to take account of the change in the
outstanding Common Stock resulting from the reverse stock split; and
RESOLVED, FURTHER, that the Conversion Time for the one-for-two reverse
split of the issued and outstanding shares of Common Stock as authorized on July
22, 1992, and approved by the Corporation's stockholders, shall be at the close
of business on Monday, November 9, 1992.
* * *
(The Board of Directors provided for a series of Preferred Stock on July
18, 1995 by the addition to the Certificate of Incorporation of the following
paragraphs which were incorporated in a Certificate of Designations, Preferences
and Rights of Series A Junior Participating Preferred Stock filed on July 25,
1995 ):
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Restated
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 500,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $.05 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $.001 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date,
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<PAGE> 5
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time after August 28,
1995 (the "Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $.05 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes to which holders of Class A Junior Participating Preferred
Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
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<PAGE> 6
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series A Junior Participating
Preferred Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders
of Series A Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be exercised unless the holders
of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the Chairman of the Board, President or the
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote pursuant to this
paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by
mailing a copy of such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of Directors until the holders of Preferred Stock
shall have exercised their right to elect two (2) Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which elected
the Director whose office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
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<PAGE> 7
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of incorporation
or by-laws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Participating
Preferred Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior Participating
Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock ranking on
a parity with the Series A Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may
- 7 -
<PAGE> 8
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received [$.10] per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect to all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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<PAGE> 9
Section 8. Optional Redemption.
(A) The Corporation shall have the option to redeem the whole or any
part of the Series A Junior Participating Preferred Stock at any time at a
redemption price equal to, subject to the provisions for adjustment hereinafter
set forth, 100 times the "current per share market price" of the Common Stock on
the date of the mailing of the notice of redemption, together with unpaid
accumulated dividends to the date of such redemption. In the event the
Corporation shall at any time after the Rights Declaration Date, (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were otherwise entitled
immediately prior to such event under the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. The "current per share market
price" on any date shall be deemed to be the average of the closing price per
share of such Common Stock for the 10 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Common Stock is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the Common Stock
is listed or admitted to trading or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use or, if on any such date the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Corporation. If on such date no such market maker is
making a market in the Common Stock, the fair value of the Common Stock on such
date as determined in good faith by the Board of Directors of the Corporation
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, a Monday,
Tuesday, Wednesday, Thursday or Friday on which banking institutions in the
State of New York are not authorized or obligated by law or executive order to
close.
(B) Notice of any such redemption shall be given by mailing to the
holders of the Series A Junior Participating Preferred Stock a notice of such
redemption, first class postage prepaid, not later than the thirtieth day and
not earlier than the sixtieth day before the date fixed for redemption, at their
last address as the same shall appear upon the books of the Corporation. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the stockholder received such
notice, and failure duly to give such notice by mail, or any defect in such
notice, to any holder of Series A Junior Participating Preferred Stock shall not
affect the validity of the proceedings for the redemption of such Series A
Junior Participating Preferred Stock are to be redeemed, the redemption shall be
made by lot as determined by the Board of Directors.
(C) If any such notice of redemption shall have been duly given or if
the Corporation shall have given to the bank or trust company hereinafter
referred to irrevocable written authorization promptly to give or complete such
notice, and if on or before the redemption date specified therein the funds
necessary for such redemption shall have been deposited by the Corporation with
the bank or trust company designated in such notice, doing business in the
United States of America and having a capital, surplus and undivided profits
aggregating at least $25,000,000 according to its last published statement of
condition, in trust for the benefit of the holders of Series A Junior
Participating Preferred Stock called for redemption, then, notwithstanding that
any certificate for such shares so called for redemption shall not have been
surrendered for cancellation, from and after the time of such deposit all such
shares called for redemption
- 9 -
<PAGE> 10
shall no longer be deemed outstanding and all rights with respect to such shares
shall no longer be deemed outstanding and all rights with respect to such shares
shall forthwith cease and terminate, except the right of the holders thereof to
receive from such bank or trust company at any time after the time of such
deposit the funds so deposited, without interest, and the right to exercise, up
to the close of business on the fifth day before the date fixed for redemption,
all privileges of conversion or exchange if any. In case less than all the
shares represented by any surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. Any interest
accrued on such funds shall be paid to the Corporation from time to time. Any
funds so deposited and unclaimed at the end of six years from such redemption
date shall be repaid to the Corporation, after which the holders of shares of
Series A Junior Participating Preferred Stock called for redemption shall look
only to the Corporation for payment thereof; provided that any funds so
deposited which shall not be required for redemption because of the exercise of
any privilege of conversion or exchange subsequent to the date of deposit shall
be repaid to the Corporation forthwith.
Section 9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. So long as any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
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<PAGE> 1
Exhibit 3.3
CERTIFICATE OF ELIMINATION
OF
NEOPROBE CORPORATION
Neoprobe Corporation, a corporation organized and existing under the
general Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST:That the Board of Directors by unanimous written consent of its
members, filed with the minutes of the Board, duly adopted resolutions setting
forth the proposed elimination of the Preferred Stock designated as "5% Series B
Convertible Preferred Stock" as set forth herein:
RESOLVED, that no shares of the 5% Series B Convertible
Preferred Stock are outstanding and none will be issued.
FURTHER RESOLVED, that a Certificate of Elimination be
executed which shall have the effect when filed in Delaware of
eliminating from the Restated Certificate of Incorporation all
reference to the 5% Series B Convertible Preferred Stock.
SECOND: None of the authorized shares of the 5% Series B Convertible
Preferred Stock are outstanding and none will be issued.
THIRD: In accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Restated Certificate of
Incorporation is hereby amended to eliminate all reference to the 5% Series B
Convertible Preferred Stock.
IN WITNESS WHEREOF, said Neoprobe Corporation has caused this
Certificate of Elimination to be signed by David C. Bupp, its President and CEO,
this 9th day of May, 2000.
NEOPROBE CORPORATION
By:/s/David C. Bupp
---------------------------
Its: President & CEO
<PAGE> 1
Exhibit 10.1.39
SETTLEMENT AGREEMENT
--------------------
------------------
January 18, 2000
------------------
NEOPROBE CORPORATION, a Delaware corporation ("Neoprobe");
THE ARIES MASTER FUND, a Cayman Island exempted Company ("Master Fund");
THE ARIES DOMESTIC FUND, L.P., a New York Limited Partnership ("Domestic Fund");
PARAMOUNT CAPITAL, INC., a Delaware corporation ("Capital"); and
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC., a Delaware corporation ("Adviser");
hereby agree as follows:
PREAMBLE:
1. Master Fund and Domestic Fund (who may be referred to as the
"Investors" herein) purchased Preferred Shares (as such term is defined in
Section 7.1 below)] and Class L Warrants from Neoprobe under the Purchase
Agreement.
2. At the time of the purchase by the Investors, Neoprobe entered into
the Financial Advisory Agreement with Capital and issued a Unit Purchase Option
to it (the "Unit Purchase Option"), and certain directors and officers of
Neoprobe executed and delivered lock-up agreements to Neoprobe and Adviser (the
"Lock-up Agreements").
3. Disagreements have arisen between Neoprobe, on one hand, and the
Investors, Capital and Adviser, on the other hand, as to the interpretation of
the terms of the Purchase Agreement and the certificate of designations that
sets forth the terms of the Preferred Shares and the feasability of compliance
therewith.
4. The parties hereto believe that it is in their respective best
interests to restructure the investment of the Investors and their continuing
relationship.
5. Neoprobe, Master Fund, Domestic Fund, Capital and Adviser entered
into a letter agreement dated November 12, 1999 setting forth the basic terms of
this Agreement.
TERMS:
Article 1. Transaction.
Section 1.1. Basic Transaction. On the terms, and subject to the
conditions set forth in this Agreement, the parties will complete the following
transactions at the Closing:
(a) Neoprobe will pay $1,750,000 to Master Fund and $750,000 to
Domestic Fund by wire transfer of immediately available funds to bank accounts
designated by the payees at least 2 days before the Closing Date.
(b) Neoprobe will issue 2,100,000 shares of Common Stock to Master Fund
and 900,000 shares to Domestic Fund. The certificates representing such shares
will bear the following legend in larger or other contrasting type or color:
<PAGE> 2
These shares of Common Stock have not been registered under the Securities Act
of 1933, are restricted securities (as defined in Rule 144 under the Securities
Act of 1933) and may not be offered for sale, sold or otherwise transferred
except pursuant to registration under the Securities Act of 1933 or an exemption
from the registration requirements of the Securities Act of 1933. These shares
of Common Stock may not be offered for sale, sold or otherwise transferred
pursuant to an exemption from the registration requirements of the Securities
Act of 1933 until the Company has received an opinion of counsel, in form and
substance satisfactory to the Company, to the effect that such offer, sale or
other transfer is exempt.
(c) Neoprobe will issue a Class N Warrant to purchase 2,100,000 shares
of Common Stock to Master Fund and a Class N Warrant to purchase 900,000 shares
of Common Stock to Domestic Fund. The per share exercise price of the Class N
Warrants shall be equal to the average of the closing price of the Common Stock
on the OTC Bulletin Board service operated by The Nasdaq Stock Market on each of
the five trading days immediately preceding the Closing Date.
(d) The Investors will deliver all of the certificates representing the
Preferred Shares and the Class L Warrants to Neoprobe.
(e) Capital will deliver the Unit Purchase Option to Neoprobe.
(f) Adviser will deliver the Lock-up Agreements to Neoprobe.
(g) Neoprobe will execute and deliver to each of the Investors, Capital
and Adviser, a general release in the form of Exhibit B hereto.
(h) Each of the Investors, Capital and Adviser will execute and deliver
to Neoprobe a general release in the form of Exhibit C hereto.
Section 1.2. The Closing. The Closing shall take place at 10:00 a.m.,
Eastern Standard Time, at the offices of Benesch, Friedlander, Coplan & Aronoff,
88 East Broad Street, Columbus, Ohio, on the Closing Date and all of the events
and transactions which occur thereat shall be deemed to be simultaneous.
Section 1.3. Certificate. Upon receipt of the Preferred Shares at the
Closing they shall be cancelled and retired and Neoprobe shall file a
certificate with the Delaware Secretary of State under paragraph (g) of Section
152 of the Delaware General Corporation Law to the effect that no Preferred
Shares are outstanding and none will be issued.
Section 1.4. Effect of Closing. Upon due completion of the Closing, the
Purchase Agreement, the Financial Advisory Agreement, the Lock-up Agreements,
the Class L Warrants and the Unit Purchase Option shall be terminated and all of
the rights and obligations of the parties thereto shall be discharged.
Article 2. Representations and Warranties Concerning the Company. Neoprobe
hereby represents and warrants to the Investors that:
Section 2.1. Organization. Neoprobe is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Neoprobe has all requisite corporate power and authority to conduct its business
as it is now being conducted or is proposed to be conducted and to own or lease
the properties and assets that it now owns or leases.
Section 2.2 Valid Issuance, Etc. The Common Shares to be issued on the
Closing Date have been duly authorized and, when issued in accordance with this
Agreement, will be validly issued, fully paid and nonassessable and will be free
and clear of all liens imposed by or through the Company. The Class N Warrants
to be issued on the Closing Date have been duly authorized and, when issued in
accordance with this Agreement upon such Closing Date, will be validly issued
and free and clear of all liens imposed by or through the Company. The Common
Stock issuable upon the exercise of the Class N Warrants have been and will, at
all times until their issuance, be duly authorized and reserved, and upon the
exercise of the Class N Warrants in accordance with the terms and conditions
thereof and this Agreement, will be validly issued, fully paid and nonassessable
and will be free and clear of all liens
<PAGE> 3
imposed by or through the Company. The issuance of the Common Shares, the Class
N Warrants, and the Common Shares issuable upon the exercise of the Class N
Warrants will not be subject to any preemptive right of stockholders of the
Company or to any right of first refusal or other right in favor of any Person.
Section 2.3. Authorization. Neoprobe has the full corporate power and
authority to execute, deliver and enter into this Agreement, the Class N
Warrants and the general releases and to perform its obligations hereunder and
thereunder, and the execution, delivery and performance of each of these
instruments and all other transactions contemplated by each of them have been
duly authorized by Neoprobe. Each of the Agreement, the Class N Warrants and the
general releases constitutes a legal, valid and binding obligation of Neoprobe,
enforceable in accordance with its terms.
Section 2.4. No Conflict The execution and delivery by Neoprobe of the
Agreement, the Class N Warrants and the general releases, the offering and
issuance of the Common Shares and the Warrants, and the performance and
fulfillment of Neoprobe of its obligations thereunder, do not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, or event which, with notice or lapse of time or
both, would constitute a breach of or default under, (iii) result in the
creation of any lien, security interest, adverse claim, charge or encumbrance
upon the capital stock or assets of Neoprobe pursuant to, (iv) give any third
party the right to accelerate any obligation under or terminate, (v) result in a
violation of, (vi) result in the loss of any license, certificate, legal
privilege or legal right enjoyed or possessed by Neoprobe under, or (vii)
require any authorization, consent, approval, exemption or other action by or
notice to any court or administrative or governmental body pursuant to or
require the consent of any other Person under, the Certificate of Incorporation
or By-Laws of Neoprobe or any law, statute, rule or regulation to which Neoprobe
is subject or by which any of its properties are bound, or any material
agreement, instrument, order, judgment or decree to which Neoprobe is subject or
by which its properties are bound.
Section 2.5. SEC Documents. Neoprobe has made available to the
Investors a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by Neoprobe with the SEC since
January 1, 1995 (as such documents have since the time of their filing been
amended, the "SEC Documents") which are all the documents (other than
preliminary material) that Neoprobe was required to file with the SEC since such
date. As of their respective dates, the SEC Documents complied in all respects
with the requirements of the Securities Act or the Securities Exchange Act as
the case may be, and the rules and regulations of the SEC thereunder applicable
to such SEC Documents and none of the SEC Documents contained any untrue
statement of a material fact or omitted to statement of material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Neoprobe included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form 10-Q
of the SEC) and fairly present the financial position of Neoprobe as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended.
Section 2.6. Compliance with Securities Laws. Assuming the accuracy and
truth of each of representations set forth in Article 3 below, the shares of
Common Stock and the Class N Warrants were offered and will be sold and issued,
in compliance with all applicable federal and state securities laws.
Article 3. Representations and Warranties of the Investors, Capital and Adviser.
Section 3.1. Investors. Each of the Investors severally, and on its own
behalf represents and warrants to Neoprobe as follows:
(a) Such Investor is an "accredited investor" within the meaning of
Regulation D under the Securities Act.
(b) Such Investor has experience in making investments in development
stage biotechnology companies and is acquiring the Common Shares and the
Warrants for its own account and not with a present view to, or for sale in
connection with, any distribution thereof in violation of the registration
<PAGE> 4
requirements of the Securities Act.
(c) Such Investor understands that the shares of Common Stock and the
Class N Warrants are not, and any shares of Common Stock acquired on exercise
thereof at the time of issuance may not, be registered under the Securities Act
on the ground that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that Neoprobe's reliance on such exemption
is predicated on such Investor's representations set forth herein.
(d) Such Investor has consented to the placing of a legend on the
certificates representing its respective Common Shares and Warrants to the
effect that the shares of Common Stock issuable hereunder or upon the exercise,
as the case may be, of the Warrants have not been registered under the
Securities Act and may not be transferred except in accordance with applicable
securities laws or an exemption therefrom.
(e) Such Investor has had an opportunity to ask questions and receive
answers from Neoprobe regarding the terms and conditions of the offering of the
Common Stock and Class N Warrants and the business, properties, prospects, and
financial condition of Neoprobe and to obtain additional information (to the
extent Neoprobe possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to it or to which it had access. The foregoing, however,
does not limit or modify the representations and warranties of Neoprobe in
Article 2 of this Agreement or the right of such Investor to rely thereon.
(h) Such Investor has the power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, having obtained all
required consents, if any, and this Agreement constitutes and the general
releases, when executed and delivered, will constitute the legal valid and
binding obligations of such Investor.
Section 3.2. Capital. Capital represents and warrants to Neoprobe that
it has the corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder, having obtained all required consents,
if any, and this Agreement constitutes and the general releases, when executed
and delivered, will constitute its legal valid and binding obligations.
Section 3.3. Adviser. Adviser represents and warrants to Neoprobe that
it has the corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder, having obtained all required consents,
if any, and this Agreement constitutes and the general releases, when executed
and delivered, will constitute its legal valid and binding obligations.
Article 4. Conditions Precedent.
Section 4.1. Conditions Precedent to Obligations of the Investors,
Capital and Adviser. The obligations of the Investors, Capital and Adviser to
attend the Closing and enter into the transactions and make the deliveries set
forth in Section 1.1 above are subject to the satisfaction, on or before the
Closing Date, of each of the following conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Neoprobe contained in this Agreement shall be true on and as of
the Closing Date with the same effect as if they were made on and as of the
Closing Date, except as affected by transactions contemplated hereby and except
that any such representation and warranty made as of a specified date other than
the date of this Agreement shall have been true as of such date.
(b) Performance of Agreements. Neoprobe shall have performed all
obligations and agreements and complied with all covenants contained in this
Agreement which are to be performed and complied with by it on or before the
Closing Date.
(c) Litigation. No litigation shall be pending or overtly threatened
seeking an order of any court against the transactions contemplated by this
Agreement. No order of any court against the transactions contemplated by this
Agreement shall exist.
<PAGE> 5
Section 4.2. Conditions Precedent to the Closing Obligations of
Neoprobe. The obligations of Neoprobe to attend the Closing and enter into the
transactions and make the deliveries set forth in Section 1.1 above are subject
to the satisfaction, on or before the Closing Date, of each of the following
conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of the Investors, Capital and Adviser contained in this Agreement
shall be true on the Closing Date with the same effect as if they were made on
the Closing Date, except as affected by transactions contemplated hereby and
except that any such representation and warranty made as of a specified date
other than the date of this Agreement shall have been true on and as of such
date.
(b) Performance of Agreements. The Investors, Capital and Adviser shall
have performed all obligations and agreements and complied with all covenants
contained in this Agreement or in any document delivered in connection herewith
to be performed and complied with by it on or before the Closing Date.
(c) Litigation. No litigation shall be pending or overtly threatened
seeking an order of any court against the transactions contemplated by this
Agreement. No order of any court against the transactions contemplated by this
Agreement shall exist.
Article 5. Covenants.
Section 5.1. Public Announcements. Neoprobe and Capital will consult
with each other before issuing any press release or otherwise making a public
statement or announcement concerning the transactions contemplated by this
Agreement and Neoprobe shall not use the names of the Investors, Capital or
Advisers without the prior written consent of each.
Section 5.2. Further Assurances. On and after the Closing Date, the
parties hereto shall execute and deliver all such further assignments,
endorsements, and other documents as any of them may reasonably request in order
to consummate the transactions contemplated by this Agreement.
Section 5.3 Transactions in Common Stock. From the date hereof until
the Closing Date and the completion of the Closing, no party hereto may purchase
or sell any shares of Common Stock or submit any bids to purchase or ask prices
to sell shares of Common Stock. Investors, Capital and Adviser will not,
directly or indirectly, purchase any shares of Common Stock until 180 days after
the Closing Date.
Section 5.4 Status Quo. From the date hereof until the Closing Date and
the completion of the Closing, the parties hereto shall maintain the status quo
among them and shall not take any action to disturb it, including, but not
limited to, commencing any legal actions concerning matters which will be
released pursuant to this Agreement, converting any Preferred Shares, exercising
any Class L Warrants or giving any notices under the Purchase Agreement or the
certificate of designations that sets forth the terms of the Preferred Shares.
Section 5.5 Voting Agreement. The Investors will, in person or by
proxy, vote all of their shares of Common Stock, whether such shares are now
owned or hereafter acquired, in accordance with the recommendations of the
management of Neoprobe on any and all issues submitted to a vote of the
stockholders of Neoprobe for a period of two (2) years after the Closing Date.
The Investors will be present, in person or by proxy, at every meeting of the
stockholders of the Company held during the two (2) year period following the
Closing Date. The Investors will execute and deliver to the designee of the
board of directors of Neoprobe any proxies requested by Neoprobe in order to
effectively carry out the provisions of this Section 5.6. If the investors
transfer any shares of Common Stock issued hereunder or upon the exercise of the
Class N Warrants to any Affiliate of Capital or Advisors at any time during the
two (2) year period after the Closing Date, Capital and Advisors shall cause
such Affiliates to comply with the provisions of this Section 5.6 to the same
extent that the Investors would be required to, if they then held such shares.
Article 6. Registration of Common Stock.
<PAGE> 6
Section 6.1. Registration. (a) Not more than 45 days after the Closing
Date, Neoprobe will file with the SEC a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Common Stock
beneficially owned by the Investors following the Closing. Not later than 45
days following the exercise of the Class N Warrants, Neoprobe will amend the
Shelf Registration Statement to include the shares of Common Stock issued to the
Investors as a consequence of such exercise. Neoprobe will use its best efforts
to effect the registration of such securities (including, without limitation,
the execution of any required undertaking to file post-effective amendments,
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with applicable securities laws, requirements or
regulations) as may be reasonably requested and as would permit or facilitate
the sale and distribution of all of the Common Stock entitled to be registered
under this Article 6 ("Registrable Securities") until the distribution thereof
is complete.
(b) Neoprobe shall not be obligated to maintain the effectiveness of
the Shelf Registration Statement (and any related qualifications and compliance)
after the earlier of (i) the third anniversary of the Closing Date or (ii) at
such time as Neoprobe shall deliver an opinion of counsel reasonably
satisfactory to the holders of Registrable Securities (such holders, including,
without limitation, the holders of the Class N Warrants, are referred to as the
"Holders') in form and substance reasonably satisfactory to each Holder that (A)
such Holders may sell in a single transaction all Registrable Securities then
held by such Holder under an applicable exemption from the registration
requirements of the Securities Act and all other applicable securities laws and
(B) all transfer restrictions and restrictive legends with respect to such
Registrable Securities may be removed upon the consummation of such sale.
Section 6.2. Registration Procedures. In connection with the
registration of any Registrable Securities under the Securities Act as provided
in this Article 6, Neoprobe will use its reasonable best commercial efforts, to:
(a) Prepare and file with the SEC the Shelf Registration Statement with
respect to such Registrable Securities and cause such Shelf Registration
Statement to become effective as expeditiously as possible but in any event by
the Targeted Effective Date (as such term is defined in Section 6.5(b));
(b) Prepare and file with the SEC such amendments and supplements to
such Shelf Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Shelf Registration Statement
effective until the disposition of all securities in accordance with the
intended methods of disposition by the seller thereof set forth in such Shelf
Registration Statement shall be completed, and to comply with the provisions of
the Securities Act (to the extent applicable to Neoprobe) with respect to such
dispositions;
(c) Furnish to each seller of such Registrable Securities such number
of copies of such Shelf Registration Statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such Shelf Registration Statement (including each
preliminary prospectus), in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request, in order
to facilitate the disposition of the Registrable Securities owned by such
seller;
(d) Register or qualify such Registrable Securities covered by such
Shelf Registration Statement under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller, except that Neoprobe will not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not, but for the requirements of this
Section 6.2(d) be obligated to be qualified, to subject itself to taxation in
any such jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) Provide a transfer agent and registrar for all such Registrable
Securities covered by such Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement;
(f) Notify each seller of such Registrable Securities at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such Shelf Registration Statement contains an untrue statement of a
<PAGE> 7
material fact or omits any fact necessary to make the statements therein not
misleading, and, at the request of any such seller, Neoprobe will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(g) Cause all such Registrable Securities to be listed on each
securities exchange or automated over-the-counter trading system on which
similar securities issued by Neoprobe are then listed;
(h) Enter into such customary agreements (including, in the event that
the Investors elect to engage an underwriter in connection with the Shelf
Registration Statement, an underwriting agreement containing customary terms and
conditions) and take all such other actions as reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities; and
(i) Make available for inspection by any seller of Registrable
Securities, all financial and other records, pertinent corporation documents and
properties of Neoprobe, and cause Neoprobe's officers, directors and employees
to supply all information reasonably requested by any such seller in connection
with the Shelf Registration Statement pursuant to Section 6.1.
Section 6.3 Registration and Selling Expenses.
(a) All expenses incurred by Neoprobe in connection with Neoprobe's
performance of or compliance with this Article 6, including, without limitation
(i) all registration and filing fees (including all expenses incident to filing
with the National Association of Securities Dealers, Inc.), (ii) blue sky fees
and expenses, (iii) all necessary printing and duplicating expenses, and (iv)
all fees and disbursements of counsel and accountants retained by Neoprobe
(including the expenses of any audit of financial statements) (all such expenses
being called "Registration Expenses"), will be paid by Neoprobe except as
otherwise expressly provided in this Section 6.3.
(b) Neoprobe will, in any event, in connection with any registration
statement, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal, accounting
or other duties in connection therewith and expenses of audits of year-end
financial statements), the expense of liability insurance and the expenses and
fees for listing the securities to be registered on one or more securities
exchanges or automated over-the-counter trading systems on which similar
securities issued by Neoprobe are then listed.
(c) Nothing in this Agreement shall be construed to prevent any Holder
of Registrable Securities from retaining such counsel as they shall choose at
their own expense.
Section 6.4. Indemnification. (a) Neoprobe shall indemnify, to the
extent permitted by law, each Holder of Registrable Securities, its officers and
directors, if any, and each person, if any, who controls such Holder within the
meaning of the Securities Act, against all losses, claims, damages, liabilities
and expenses (under the Securities Act or common law or otherwise) caused by any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented if Neoprobe
has furnished any amendments or supplements thereto) or any preliminary
prospectus, which registration statement, prospectus or preliminary prospectus
shall be prepared in connection with the registration contemplated by this
Article 6, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any untrue statement or alleged untrue
statement contained in, or by any omission or alleged omission from information
furnished in writing by such Holder to Neoprobe in connection with the
registration contemplated by this Article 6, provided Neoprobe will not be
liable pursuant to this Section 6.4 if such losses, claims, damages, liabilities
or expenses have been caused by any selling security holder's failure to deliver
a copy of the registration statement or prospectus, or any amendments or
supplements thereto, after Neoprobe has furnished such holder with the number of
copies required by Section 6.2(c).
(b) In connection with any registration statement in which a Holder of
Registrable Securities is participating, each such Holder shall furnish to
Neoprobe in writing such information as is reasonably
<PAGE> 8
requested by Neoprobe for use in any such registration statement or prospectus
and shall severally, but not jointly, indemnify, to the extent permitted by law,
Neoprobe, its directors and officers and each person, if any, who controls
Neoprobe within the meaning of the Securities Act, against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the registration statement or prospectus
or any amendment thereof or supplement thereto or necessary to make the
statements therein not misleading, but only to the extent such losses, claims,
damages, liabilities or expenses are caused by an untrue statement or alleged
untrue statement contained in or by an omission or alleged omission from
information so furnished in writing by such Holder in connection with the
registration contemplated by this Article 6. If the offering pursuant to any
such registration is made through underwriters, each such Holder agrees to enter
into an underwriting agreement in customary form with such underwriters and to
indemnify such underwriters, their officers and directors, if any, and each
person who controls such underwriters within the meaning of the Securities Act
to the same extent as hereinabove provided with respect to indemnification by
such Holder of Neoprobe.
(c) Promptly after receipt by an indemnified party under Section 6.4
(a) or (b) of notice of the commencement of any action or proceeding, such
indemnified party will, if a claim in respect thereof is made against the
indemnifying party under such Section, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under such Section. In case any such action or
proceeding is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel approved by such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under such Section for any legal or any other expenses subsequently
incurred by such indemnified party in connection with the defense thereof (other
than reasonable costs of investigation) unless incurred at the written request
of the indemnifying party. Notwithstanding the above, the indemnified party will
have the right to employ counsel of its own choice in any such action or
proceeding if the indemnified party has reasonably concluded that there may be
defenses available to it which are different from or additional to those of the
indemnifying party, or counsel to the indemnified party is of the opinion that
it would not be desirable for the same counsel to represent both the
indemnifying party and the indemnified party because such representation might
result in a conflict of interest (in either of which cases the indemnifying
party will not have the right to assume the defense of any such action or
proceeding on behalf of the indemnified party or parties and such legal and
other expenses will be borne by the indemnifying party). An indemnifying party
will not be liable to any indemnified party for any settlement of any such
action or proceeding effected without the consent of such indemnifying party.
(d) If the indemnification provided for in Section 6.4(a) or (b) is
unavailable under applicable law to an indemnified party in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of Neoprobe on the one hand and of the
Holders on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, or liabilities, as well as any other
relevant equitable considerations. The relative fault of Neoprobe on the one
hand and of the Holders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by
Neoprobe or by the Holders and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in Section 6.4(c), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
(1) Arbitration
<PAGE> 9
a. Any and all claims, disputes or controversies
("Disputes") arising under, out of, in connection with or in relation to the
assignment of the fault under this section 6.4(d) shall be arbitrated in
accordance wit the terms and conditions of this subsection 6.4(d)(1)
b. Notwithstanding the foregoing subsection
6.4(d)(1)(a), either party may apply to a court of competent jurisdiction for a
temporary restraining order, a preliminary injunction, or other equitable relief
to preserve the status quo or prevent irreparable harm.
c. As a condition precedent to a party's right to
commence arbitration pursuant to this section 6.4(d), if a party, in its sole
discretion, determines in good faith that a Dispute is unlikely to be resolved
amicably in good faith negotiations between the parties, that party shall send
written notice of the issue(s) in the dispute, clearly marked "Dispute Notice"
to the other party, demanding that the Dispute be settled by binding arbitration
in accordance with this provision. The parties shall have 30 days from the date
of receipt of the Dispute Notice to attempt resolution of the Dispute by
negotiations between their senior officials or representative authorized to bind
such parties.
d. If within 30 days of receipt of the Dispute Notice
the Dispute has not been resolved, either party may require the matter to be
settled by final and binding arbitration by sending written notice of such
election to the other party clearly marked "Arbitration Demand."
e. The arbitration shall be filed with the office of
the American Arbitration Association ("AAA") located in New York, NY or such
other AAA office as the parties may agree upon (without any obligation to so
agree). The arbitration shall be conducted pursuant to the Commercial
Arbitration Rules of the AAA. Each party shall pay the compensation and all
other costs and expenses ("The Costs") of the arbitrator appointed on its
behalf, and the Costs of additional arbitrator(s) shall be paid in equal shares
by the parties. The administrative fee of the AAA will also be paid in equal
shares by the parties.
A. The arbitrators shall have the sole
authority to decide whether or not any Dispute between the parties is
arbitrable.
B. The decision of the arbitrators, which
shall be in writing and state the findings of facts and conclusions of law upon
which the decision is based, shall be final and binding upon the parties who
shall forthwith comply after receipt thereof.
(e) Promptly after receipt by Neoprobe or any Holder of Registrable
Securities of notice of the commencement of any action or proceeding, such party
will, if a claim for contribution in respect thereof is to be made against
another party (the "contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the contributing party will
not relieve it from any liability which it may have to any other party other
than for contribution under this Agreement. In case any such action, suit, or
proceeding is brought against any party, and such party notifies a contributing
party of the commencement thereof, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party
similarly notified.
Section 6.5. Additional Common Stock Issuable Upon Delay of
Registration and Other Events.
(a) Except to the extent any delay is due to the failure of a Holder to
reasonably cooperate in providing to Neoprobe such information as shall be
reasonably requested by Neoprobe for use in the Shelf Registration Statement, if
the Shelf Registration Statement is not filed with the SEC within 45 days
following the Closing Date (the "Outside Target Date"), Neoprobe shall
immediately issue, for no additional consideration, to each Holder additional
shares of Common stock equal to one half percent (0.5%) of the number of shares
of Common Stock that were Registrable Securities held by such Holder on the
Outside Target Date, for each day after the Outside Target Date on which the
offices of the SEC are open for business and the Registration Statement remains
unfiled.
(b) Except to the extent any delay is due to the failure of a Holder to
reasonably cooperate in providing to Neoprobe such information as shall be
reasonably requested by Neoprobe for use in the Shelf Registration Statement, if
the Shelf Registration Statement is not declared effective by the SEC by the
Targeted Effective Date, Neoprobe shall immediately issue, for no additional
consideration, to each
<PAGE> 10
Holder, additional shares of Common stock equal to one half percent (0.5%) of
the number of shares of Common Stock that were Registrable Securities held by
such Holder on the Targeted Effective Date, for each day after the occurrence of
the Targeted Effective Date on which the offices of the SEC are open for
business and the Shelf Registration Statement is not declared effective by the
SEC. As used herein, "Targeted Effective Date" shall mean the 90th day after the
filing of the Shelf Registration Statement with the SEC, provided that in the
event the SEC does not provide comments to Neoprobe (or declare the Shelf
Registration Statement Effective) within (i) 30 days after the initial filing of
the Shelf Registration Statement or (ii) seven days after the filing of any
pre-effective amendment to the Shelf Registration Statement, so long as Neoprobe
has used reasonable efforts to respond promptly to any comments pending at the
time a pre-effective amendment to the Shelf Registration Statement is filed, the
Targeted Effective Date shall be deferred for a number of days equal to the
number of days by which the SEC's response time exceeded 30 days or seven days,
as applicable. The Targeted Effective Date shall also be deferred during any
time that Neoprobe has filed with the SEC a proxy statement for a sale of
substantially all of its assets or a merger until the completion or abandonment
of the transaction described in such proxy statement.
(c) All shares of Common Stock issuable pursuant to this Section 6.5
shall be duly authorized, fully paid and non-assessable shares of Common Stock
and shall be included in the Shelf Registration Statement contemplated by
Section 6.1. Such shares shall be registered in Investors' names or the name of
the nominee(s) of Investors in such denominations as Investors shall request
pursuant to instructions delivered to Neoprobe.
Section 6.6. Regulation M. Any Holder who owns any shares of Common
Stock included in a Shelf Registration Statement under this Article 6, covenants
and agrees with the Company by the inclusion of his shares in the Shelf
Registration Statement that, for so long as any of the Common Stock is salable
thereunder, such Holder shall not purchase any shares of Common Stock in a
transaction that would violate SEC Regulation M.
Section 6.7. Rule 144. Until all of the Registrable Securities, have
been sold under a registration statement declared effective by the Securities
and Exchange Commission or pursuant to Rule 144 promulgated under the Securities
Act of 1933, the Company shall use its reasonable best efforts to file with the
Securities and Exchange Commission all current reports and the information as
may be necessary to enable the Holders to effect sales of their shares in
reliance upon Rule 144.
Article 7. General.
Section 7.1. Definitions. Certain words and phrases used in this
Agreement shall have the meanings given to them below in this Section:
"Class L Warrants" means the Class L Warrants to purchase shares of
Common Stock issued by Neoprobe under the Purchase Agreement.
"Class N Warrants" means the Class N Warrants to purchase shares of
Common Stock in the form attached as Exhibit A (the "Warrants").
"Closing" means the meeting of the parties hereto on the Closing Date
for the purposes of consummating the transactions contemplated by this
Agreement.
"Closing Date" means December [ ], 1999, or such other date as the
parties hereto may mutually agree upon.
"Common Stock" means the common stock, par value $.001 per share, of
Neoprobe.
"Generally Accepted Accounting Principles" means generally accepted
accounting principles consistently applied.
"Person" shall mean any natural person and any corporation,
partnership, joint venture, limited liability company or other legal person, but
shall not include any governmental entity.
<PAGE> 11
"Preferred Shares" means the shares of 5% Series B Convertible
Preferred Stock, par value $.001 per share, stated value $100 per share, of
Neoprobe
"Purchase Agreement" means the Preferred Stock and Warrant Purchase
Agreement Dated as of February 16, 1999 among Neoprobe and the Investors.
"Securities Act" means, as of any given time, the Securities Act of
1933 or any similar federal law then in force.
"Securities Exchange Act" means, as of any given time, the Securities
Exchange Act of 1934 or any similar federal law then in force.
"SEC" means the United States Securities and Exchange Commission and
includes any governmental body or agency succeeding to its functions.
Section 7.2. Survival of Representations, Warranties and Covenants.
Except as otherwise provided for in this Agreement all representations,
warranties, covenants and agreements contained in this Agreement, or in any
document, exhibit, schedule or certificate by any party delivered in connection
herewith shall survive the execution and delivery of this Agreement and the
Closing and the consummation of the transactions contemplated hereby.
Section 7.3. Expenses. Except as otherwise provided in Section 6.3
above each of the parties to this Agreement shall pay all its own expenses in
connection with this Agreement and the transactions contemplated herein.
Section 7.4. Entire Agreement. This Agreement, the Class N Warrants and
the general releases executed and delivered pursuant to this Agreement are all
of the agreements among the parties hereto and are a complete and exclusive
statement of the terms of the agreements among them and, such agreements
supersede and discharge all prior written agreements among the parties hereto
and all prior and contemporaneous oral agreements among them. There are no oral
conditions precedent to the effectiveness of this Agreement.
Section 7.5. Amendments and Waivers. No amendment, modification or
termination of this Agreement shall be binding on any party hereto unless it is
in writing and is signed by the party to be charged. No course of dealing
between or among any persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any person under or by reason of this Agreement. No
waiver of any right or remedy under this Agreement shall be binding on any party
unless it is in writing and is signed by the party to be charged. No such waiver
of any right or remedy under any term of this Agreement shall in any event be
deemed to apply to any subsequent default under the same or any other term
contained herein.
Section 7.6. Successors and Assigns. The terms of this Agreement shall
be binding upon and inure to the benefit of the parties, their respective heirs,
personal representatives or corporate or partnership successors. Nothing herein
expressed or implied is intended or shall be construed to give any person other
than the parties hereto any rights or remedies under this Agreement.
Section 7.7. Notices. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and confirmation of receipt is received or
two (2) days after being sent by certified or registered United States mail,
return receipt requested, postage prepaid, addressed to the party at the address
set forth below and with such copies delivered, transmitted or mailed to such
persons as are specified below. Any party may change his address for notices in
the manner set forth above.
If to Neoprobe:
Neoprobe Corporation
425 Metro Place North, Suite 300
Dublin, OH 43017-1367
<PAGE> 12
Attn: David C. Bupp
With a Copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
Suite 900
88 East Broad Street
Columbus, OH 43215
Attention: Robert S. Schwartz
If to the Investors:
The Aries Master Fund
The Aries Domestic Fund
in care of Paramount Capital Asset Management, Inc.
787 Seventh Avenue, 48th Floor
New York, NY 10019
Attn: David M. Tanen
With a Copy to:
Roberts, Sheridan & Kotel,
A Professional Corporation
Tower Forty-Nine
12 East 49th Street, 30th Floor
New York, NY 10017
Attention: Ira L. Kotel
If to Adviser:
Paramount Capital Asset Management, Inc.
787 Seventh Avenue, 48th Floor
New York, NY 10019
Attn: David M. Tanen
With a Copy to:
Roberts, Sheridan & Kotel,
A Professional Corporation
Tower Forty-Nine
12 East 49th Street, 30th Floor
New York, NY 10017
Attention: Ira L. Kotel
If to Capital:
Paramount Capital, Inc.
787 Seventh Avenue, 48th Floor
New York, NY 10019
Attn: David M. Tanen
With a Copy to:
Roberts, Sheridan & Kotel,
A Professional Corporation
Tower Forty-Nine
12 East 49th Street, 30th Floor
New York, NY 10017
Attention: Ira L. Kotel
Section 7.8. Counterparts. This Agreement may be executed in any number
of counterparts and,
<PAGE> 13
notwithstanding that any of the parties did not execute the same counterpart,
each of such counterparts shall, for all purposes, be deemed an original, and
all such counterparts shall constitute one and the same instrument binding on
all of the parties thereto.
Section 7.9. Headings. The headings of the Sections are inserted as a
matter of convenience and for reference only and in no way define, limit or
describe the scope of this Agreement or the meaning of any provision hereof.
Section 7.10. Saturdays, Sundays and Holidays. Where this Agreement
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.
Section 7.11. Joint Preparation. This Agreement shall be deemed to have
been prepared jointly by the parties hereto. Any ambiguity herein shall not be
interpreted against any party hereto and shall be interpreted as if each of the
parties hereto had prepared this Agreement.
Section 7.12. Rules of Construction. In this Agreement, 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 words of
the neuter gender may refer to any gender.
Section 7.13. Severability. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless the provision
held invalid shall substantially impair the benefit of the remaining portion of
this Agreement.
Section 7.14. Governing Law; Consent to Jurisdiction. The validity,
performance, construction and effect of this Agreement shall be governed by
those laws of the State of New York which are applicable to agreements that are
negotiated, executed, delivered and performed solely in the State of New York.
The parties hereto irrevocably consent to the jurisdiction of the courts of the
State of New York and of any federal court located in such State in connection
with any action or proceeding arising out of or relating to this Agreement, any
document or instrument delivered pursuant to, in connection with or
simultaneously with this Agreement, or a breach of this Agreement or any such
document or instrument. In any such action or proceeding, each party hereto
waives personal service of any summons, complaint or other process and agrees
that service thereof may be made in accordance with the notice provisions of
Section 7.7. above. Within 30 days after such service, or such other time as may
be mutually agreed upon in writing by the attorneys for the parties to such
action or proceeding, the party so served shall appear or answer such summons,
complaint or other process.
<PAGE> 14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NEOPROBE CORPORATION
By:/s/ David C. Bupp
------------------------------------------
Name: David C. Bupp
Title: President and Chief Executive Officer
THE ARIES MASTER FUND,
a Cayman Island exempted Company
By:/s/ Lindsay A. Rosenwald, M.D.
------------------------------------------
Name: Lindsay A. Rosenwald, M.D.
Title: Chairman of the General Partner
THE ARIES DOMESTIC FUND, L.P.
By:/s/ Lindsay A. Rosenwald, M.D.
------------------------------------------
Name: Lindsay A. Rosenwald, M.D.
Title: Chairman of the General Partner
PARAMOUNT CAPITAL, INC.
By:/s/ Lindsay A. Rosenwald, M.D.
------------------------------------------
Name: Lindsay A. Rosenwald, M.D.
Title: Chairman
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC.
By:/s/ Lindsay A. Rosenwald, M.D.
------------------------------------------
Name: Lindsay A. Rosenwald, M.D.
Title: Chairman
<PAGE> 1
Exhibit 10.1.40
OPTION AGREEMENT
THIS AGREEMENT entered into this 1st day of February 2000 between
Neoprobe Corporation, a Delaware corporation with principal offices at 425 Metro
Place North, Suite 300, Dublin, Ohio 43017-1331 (hereinafter "Neoprobe"), and
Reico Ltd. (acting as trustee for NuRIGS, Ltd.), Ramat Aviv Tower, 40 Einstein
Street, 8th Floor, Tel Aviv 69101, Israel (hereinafter "Reico").
WHEREAS, Neoprobe has developed or has rights to certain proprietary
technology relating to radiotargeted surgery or radioimmunoguided surgery using
a radioactive monoclonal antibody or antibody fragment (the "RIGS(R)
technology");
WHEREAS, Neoprobe has determined that it will not commercialize the
RIGS Technology without a development partner or through a licensee;
WHEREAS, Reico is trustee for NuRIGS. Ltd. a company that will be
organized to develop products useful for radioimmunoguided surgical procedures;
WHEREAS, Reico acting on behalf of NuRIGS is interested in evaluating
the RIGS technology to determine if Reico has an interest in acquiring exclusive
rights to such technology; and
WHEREAS, Neoprobe is willing to allow Reico to evaluate the technology
with an option to acquire exclusive rights.
NOW, THEREFORE, in consideration of the mutual covenants exchanged
herein, the parties agree as follows:
ARTICLE I. DEFINITIONS
1.01 Effective Date. The term "Effective Date" of this Agreement shall mean
the date first written hereinabove.
1.02 Licensed Product. As used herein, the term "Licensed Product" means any
composition or product that uses the Technology, is covered by Patent
Rights, or the use of which would constitute, but for rights granted to
Reico pursuant to a License Agreement, an infringement of a pending or
issued claim within Patent Rights.
1.03 Patent Rights. As used herein, the term "Patent Rights" shall mean any
United States or foreign patents or patent applications owned or
controlled by Neoprobe relating to the "Technology" as well as
renewals, reissues, reexaminations, extensions, and patents of addition
and patents of importation relating thereto, including any and all
other intellectual property rights in and to the Technology (except the
Trademarks); the extent Patent Rights as of the Effective Date are
listed in Schedule 1.03 attached hereto.
1.04 Schedules. The Schedules to this Agreement are listed below and are an
integral part of this Agreement and are incorporated herein.
SCHEDULE NO. DESCRIPTION
------------ -----------
1.03 List of Patent Rights
1.06 List of Trademarks
2.03 Letter Of Instructions
1.05 Technology. As used herein, the term "Technology" shall mean all
information and data owned and/or controlled by Neoprobe relating to
radioguided surgery using a tissue specific radiolabeled monoclonal
antibody (MAb), antibody fragment (FAb) or protein targeting agent,
whether patentable or unpatentable, including but not limited to all
development, preclinical, clinical and manufacturing data and
information relating to CC49 MAb or HuCC49DCH2 FAb.
1
<PAGE> 2
1.06 Trademarks. As used herein, the term "Trademark" or "Trademarks" means
the U.S. and foreign marks listed in Schedule 1.06 attached hereto.
ARTICLE II. OPTION GRANT AND PILOT STUDY
2.01 Option. Neoprobe hereby agrees to grant to Reico and does hereby grant
to Reico, and Reico hereby accepts such grant, an "Option" to acquire
an exclusive, irrevocable, perpetual (unless terminated for material
breach) worldwide, royalty-bearing license to the Technology, Patent
Rights, and Trademarks. The continuation of the validity of the Option
granted in this Section 2.01 is contingent upon Reico making the
payment specified by Section 3.01.
2.02 Option Period. Unless otherwise agreed to by the parties in writing,
the term of the Option granted pursuant to Section 2.01 (the "Option
Period") shall be the period running from the Effective Date to
December 31, 2000.
2.03 Pilot Study. Immediately following signature hereof, Neoprobe shall
instruct BioInvent AB, Sweden, by sending them a letter in the form of
Schedule 2.03, to transfer the HuCC49DCH2 antibody fragment,
manufacturing and testing files to The Ohio State University to the
attention of Dr. Edward Martin and Dr. George Hinkle. It is recorded
and agreed that such transfer is made for the purposes of a physician
Investigated New Drug Pilot Study (the "Pilot Study") to be sponsored,
managed and monitored by Reico. Reico shall incur all expenses related
to the Pilot Study and shall be the sole owner of all data and
intellectual property rights relating and deriving from the Pilot
Study.
ARTICLE III. CONSIDERATION
3.01 Consideration. In consideration of the continuance validity of the
Option granted herein, Reico shall pay Neoprobe a non-refundable
payment of Fifty Thousand Dollars $50,000) due in two (2) equal
payments, the first payment due on or before May 31, 2000 and the
second payment due on or before August 31,2000. For the avoidance of
doubt if Reico shall elect not to pay such non refundable payment the
option shall expire, this Agreement shall terminate and Reico shall
instruct The Ohio State University to return to Neoprobe all remaining
HuCC49DCH2 antibody fragment, and in such event no party shall
have any claims, contentions or demands against the other party in
connection with this Agreement.
ARTICLE IV. DUE DILIGENCE
4.01 Completion of Due Diligence. Reico shall have until the end of the
Option Period to complete its due diligence activities relating to the
Technology, Patent Rights and Trademarks.
4.02 Exercise of Option. Reico shall have until December 31, 2000 to
exercise the option granted to it pursuant to Section 2.01. Reico must
notify Neoprobe in writing on or before December 31, 2000 if it will
exercise the Option granted in Section 2.01. The exercise of the Option
shall also be deemed as execution by the parties of the definitive
license agreement referred to in Section 4.03 bellow as of the date of
such exercise.
4.03 License Agreement. As soon as possible following signature, Neoprobe
and Reico shall negotiate in good faith to arrive at the terms of a
definitive written license agreement within sixty (60) days. The
definitive license agreement shall contain, inter alia, the following
terms:
(a) the license grant shall be an exclusive, worldwide,
irrevocable, perpetual (unless terminated for material breach)
license to the Patent Rights, Trademarks, and Technology for
use in radioimmunoguided surgical procedures;
(b) Reico shall have the right to sublicense;
(c) Reico shall make an upfront payment of nine hundred thousand
dollars ($900,000) upon execution of the license agreement by
the last of the parties to sign; this upfront payment shall be
nonrefundable and shall not be creditable against future
royalties;
(d) the license shall be royalty bearing for the period specified
in the definitive license agreement and the royalty rate shall
be the greater of five percent (5%) of the net ex-factory
price of Licensed Product to a distributor or thirty dollars
(US$30) per unit dose (as shall be determined in the
definitive license agreement) of Licensed Product;
2
<PAGE> 3
(e) Reico shall be responsible for all commercial development
costs for a Licensed Product and all payment of royalties to
National Cancer Institute and such other third parties (if at
all) specified in the definitive agreement and to the extent
so specified;
(f) Neoprobe agrees to take all steps necessary to transfer to
Reico any of Neoprobe's rights relating to the Technology or
Patent Rights including such rights which flow from third
party licenses to Neoprobe, including the assignment or other
transfer of license agreements with such third parties; and
(g) Reico shall be responsible for managing and maintaining the
Patent Rights and for all payments and fees associated
therewith.
4.04 Escrow. During the period of the option granted in this Agreement, in
order to assure that Reico shall have access to the CC49 master
cellbank, CC49 and HuCC49DCH2 cell lines (the "Materials"),
Neoprobe shall enter into an agreement with BioInvent wherein BioInvent
agrees to release to Reico the Materials in the event that Neoprobe
shall suffer an "Insolvency Event" or otherwise be ordered by the
arbitrator nominated pursuant to section 8.04 below or by a competent
court. As used in this Section 4.04, the term "Insolvency Event" shall
mean the occurrence of any of the following events:
(a) Neoprobe shall admit in writing its inability, or be generally
unable, to pay its debts as such debts become due; or
(b) Neoprobe shall (1) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its
property, (2) make a general assignment for the benefit of its
creditors, (3) commence a voluntary case under the United
States Bankruptcy Code, as now or hereafter in effect (the
"Bankruptcy Code"), (4) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of
debts, (5) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against
it in any involuntary case under the Bankruptcy Code, or (6)
take any corporate action for the purpose of effecting any of
the foregoing; or
(c) A proceeding or case shall be commenced by or against Neoprobe
in any court of competent jurisdiction, seeking (1) its
liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, (2) the appointment
of a trustee, receiver, custodian, liquidator or the like of
Neoprobe or of all or any substantial part of its assets, or
(3) similar relief in respect of Neoprobe under any law
relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, or an
order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect
for a period of ninety (90) days; or an order for relief
against Neoprobe shall be entered in a case under the
Bankruptcy Code. The agreement with BioInvent shall require
Reico's prior written approval, and Reico shall have the right
to review and comment on the terms of the agreement with
BioInvent prior to its execution. All costs associated with
setting up and maintaining the escrow during the term of the
Option Agreement (up to $1,500) shall be the responsibility of
Reico. Reico shall have the right to inspect all Material
placed into escrow by Neoprobe prior to placement in escrow
and shall further be entitled to use such Material for the
purposes of the Pilot Study only. The escrow agreement shall
terminate upon the earlier of the expiration or termination of
the Option period, or the execution of a definitive license
agreement by Reico and Neoprobe pursuant to Section 4.03
herein.
ARTICLE V. TERM & TERMINATION
5.01 Term. This Agreement shall remain in effect from the Effective Date
until December 31, 2000, or until the parties enter into a written
license agreement pursuant to Section 4.03 covering the Technology,
Patent Rights, and Trademarks, at which time it shall terminate.
5.02 Termination Does Not Affect Accrued Rights. Termination of this
Agreement, pursuant to Section 4.02 or to any other provisions of this
Agreement, shall not affect any rights or obligations which may have
accrued to either party prior to the effective date of such termination
or expiration.
3
<PAGE> 4
ARTICLE VI. CONFIDENTIALITY
6.01 Confidential Information. Except for the proper exercise of any rights
granted or reserved under other provisions of this Agreement, each
party agrees that it will take such precautions as it normally takes
with its own confidential or proprietary information to keep
confidential and not to publish or otherwise disclose to a third party
except as permitted or anticipated herein, any information of a
confidential or proprietary nature furnished by the other party to it
in connection with this Agreement, including, without limitation,
technology, marketing strategy, specifications, product information,
preclinical and clinical data, inventions, processes, know-how, plans,
trade secrets, and adverse reaction reports (together called
"Confidential Information") without the prior written consent of the
other party, except to the extent that such Confidential Information is
required to be disclosed for the purpose of complying with law or
government regulations.
6.02 Period of Confidentiality. The obligation of confidentiality hereunder
shall remain in effect for three (3) years from the expiration or
termination of this Agreement; provided, however, that nothing in this
Article VI shall prevent disclosure or use by the receiving party of
any part of the Confidential Information of the other party which:
(a) was known or used by the receiving party prior to disclosure,
as evidenced by its written records made prior to the time of
disclosure hereunder;
(b) either before or after the time of disclosure becomes known to
the public other than by an unauthorized act or omission of
the receiving party;
(c) is lawfully disclosed to the receiving party by a third party
having the right to disclose said Confidential Information; or
(d) is developed by the receiving party independently from the
Confidential Information provided by the other party hereto,
as evidenced by the receiving party's written records.
6.03 Right to Use Confidential Information. Notwithstanding the restrictions
set forth in this Article VI, each party shall be entitled at all times
to use all Confidential Information provided by the other party in
order to perform its obligations or exercise its rights under this
Agreement.
6.04 Public Announcement. No press releases or other public announcements
concerning this Agreement shall be made by a party without the prior
review and consent of the other party; such consent not to be
unreasonably withheld.
6.05 Specific Terms Not To Be Disclosed. Neither Neoprobe nor Reico shall
publicly disclose the specific terms of this Agreement other than what
may be required by the Securities and Exchange Commission (SEC). Except
as required by SEC filings, the transactions contemplated hereby or
performance hereunder shall not be disclosed without first obtaining
the written consent of the other party unless there has been a prior
public disclosure of the information being disclosed by the other party
or with the other party's consent. Disclosure of the specific terms of
this Agreement to a third party must be under a written confidentiality
agreement, the terms of which are equal in scope with this Article VI.
6.06 Notwithstanding anything to the contrary above Reico shall be entitled
to make all statements and disclosure required in relation to this
Agreement and the Technology for the purposes of fund raising from
third parties including enabling such third parties to conduct due
diligence relating to the Technology, Patent Rights and Trademarks.
Disclosure of Confidential Information to a third party in connection
with due diligence activities, fund raising or other investment
activities must be made pursuant to a written confidentiality
agreement, the terms of which are equal in scope with this Article VI.
ARTICLE VII. REPRESENTATIONS & WARRANTIES
7.01 Neoprobe Authorization. Neoprobe hereby represents and warrants that it
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and that the execution,
delivery and performance of this Agreement have been fully authorized
by the Board of Directors of Neoprobe and that there is no hindrance,
by law, agreement or otherwise, preventing it from entering into this
agreement and timely and fully fulfilling all its undertakings
hereunder.
4
<PAGE> 5
7.02 Reico Authorization. Reico hereby represents and warrants that it is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Israel, and that the execution, delivery and
performance of this Agreement have been fully authorized by the Board
of Directors of Reico and that there is no hindrance, by law, agreement
or otherwise, preventing it from entering into this agreement and
timely and fully fulfilling all its undertakings hereunder.
7.03 Neoprobe Representation. Neoprobe hereby represents that as of the
Effective Date and at all times throughout the option period, to the
best of its knowledge and belief, it owns or has rights to all Patent
Rights necessary for implementation of this Agreement, including,
without limitation, all items set forth in Schedule 1.03. Neoprobe
further represents that upon exercise of the option granted herein by
Reico, Neoprobe will take all steps necessary to transfer all of
Neoprobe's rights to such Patent Rights to Reico. As part of the
measures taken by Neoprobe to protect its intellectual property, each
of Neoprobe's employees was required to sign a confidentiality
undertaking towards Neoprobe relating to its intellectual property. All
of Neoprobe's intellectual property rights in and to the Technology are
free and clear from any encumbrances. In addition, to the best of
Neoprobe's knowledge and belief, such intellectual property rights are
valid and in full force and effect, and they do not interfere with,
infringe upon, misappropriate, or otherwise come into conflict with any
intellectual property rights of third parties. Neoprobe has not
received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation
(including any claim that Neoprobe must license or refrain from using
any rights of any third party). To the best knowledge of Neoprobe, no
third party has interfered with, infringed upon, misappropriated, or
otherwise comes into conflict with any Intellectual Property rights of
Neoprobe.
ARTICLE VIII. MISCELLANEOUS
8.01 Force Majeure. Except as specifically set forth herein, neither
Neoprobe nor Reico shall be in default under this Agreement nor liable
for any failure to perform or for delay in performance resulting from
any cause beyond its reasonable control or due to compliance with any
regulations, orders, or act of any federal, provincial, state or
municipal government, or any department or agency thereof, civil or
military authority; acts of God, acts or omissions of the other party,
fires, floods or weather; strikes or lockouts; factory shutdowns,
embargoes, wars, hostilities or riots; delays or shortages in
transportation; or inability to obtain labor, manufacturing facilities
or material, provided that it shall promptly notify the other party in
writing with reasonable details of the force majeure circumstances and
their expected duration.
8.02 Taxes. Each of the parties shall bear all taxes imposed on it as a
result of its performance or receipt of funds under this Agreement
including, but not restricted to, any sales tax, any tax on or measured
by any royalty or other payment required to be made by it hereunder,
any registration tax, any tax imposed with respect to the granting of
or transfer of licenses or other rights hereunder or the payment or
receipt of royalties hereunder. The parties shall cooperate fully with
each other in obtaining and filing all requisite certificates and
documents with the appropriate authorities and shall take such further
action as may reasonably be necessary to avoid the deduction of any
withholding or similar taxes from any remittance of funds by Neoprobe
to Neoprobe hereunder.
8.03 Notice. All notices, proposals, submissions, offers, approvals,
agreements, elections, consents, acceptances, waivers, reports, plans,
requests, instructions and other communications required or permitted
to be made or given hereunder (all of the foregoing hereinafter
collectively referred to as "Communications") shall be in writing, and
shall be deemed to have been duly made or given when: (i) delivered
personally with receipt acknowledged; (ii) sent by registered or
certified mail or equivalent, return receipt requested, or (iii) sent
by facsimile or telex (which shall promptly be confirmed by a writing
sent by regular mail), or (iv) sent by recognized overnight courier for
delivery within twenty-four (24) hours, in each case addressed or sent
to the parties at the following addresses and facsimile numbers or to
such other or additional address or facsimile as any party shall
hereafter specify by Communication to the other parties:
To: Neoprobe Corporation To: Reico Ltd. (Acting as
Trustee for NuRIGS Ltd.)
David C. Bupp, President & CEO Zwi Vromen, President
Neoprobe Corporation Ramat Aviv Tower
5
<PAGE> 6
425 Metro Place North, Suite 300 40 Einstein Street, 8th Floor
Dublin, OH 43017 USA Tel Aviv 69101, ISRAEL
Fax No: 614-793-7520 Fax No: 972-3-643-9987
Notice of change of address shall be deemed given when actually
received, all other Communications shall be deemed to have been given,
received and dated on the earlier of: (i) when actually received, or on
the date when delivered personally; (ii) two (2) days after being sent
by facsimile, cable, telex (each promptly confirmed by a writing as
aforesaid) or (iii) three (3) days after sent by overnight courier; or
(iv) five (5) business days after mailing.
8.04 Arbitration. In the event of a dispute between Neoprobe and Reico
relating to a party's performance under this Agreement or a
disagreement as to the meaning of any of the terms of this Agreement,
the parties agree to hold good faith discussions to resolve such
dispute. If the parties can not resolve such dispute within sixty (60)
days after beginning good faith negotiations, the parties agree to
submit the dispute to arbitration for final resolution. The arbitration
shall be conducted by one (1) arbitrator in accordance with the
commercial rules of the American Arbitration Association, which shall
administer the arbitration and act as appointing authority. The
arbitration, including the rendering of the award, shall take place in
New York City, New York and such location shall be the exclusive forum
for resolving such dispute, controversy or claim. The decision of the
arbitrator shall be binding upon the parties hereto, and the expense of
the arbitration shall be paid as the arbitrator determines. The
decision of the arbitrator shall be executory, and judgment thereon may
be entered by any court of competent jurisdiction. The arbitrator shall
award attorneys' fees to the prevailing party.
8.05 Governing Law. This Agreement shall be construed and governed by the
laws of the State of Ohio and subject to the provisions of Section
8.04, adjudicated within the exclusive jurisdiction of the courts of
the State of Ohio, Franklin County. If any provision of this Agreement
including, but not limited to, the waiver of claims under any
particular statute, should be deemed unenforceable, the remaining
provisions shall, to the extent possible, be carried into effect,
taking into account the general purpose and spirit of this Agreement.
8.06 Other Instruments. The parties hereto covenant and agree that they will
execute such other and further instruments and documents as are or may
become reasonably necessary or convenient to effectuate and carry out
the provisions of this Agreement or may be reasonably requested by the
other party.
8.07 Legal Construction. In case any one or more of the provisions contained
in this Agreement shall be invalid or unenforceable in any respect, the
validity and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision
which shall be a reasonable substitute for such invalid and
unenforceable provision in light of the tenor of this Agreement, and,
upon so agreeing, shall incorporate such substitute provision in this
Agreement.
8.08 Agreement, Modification, Consents and Waivers. This Agreement
supersedes all prior agreements, written or oral, between the parties
whether with respect to the subject matter herein, and contains the
entire agreement of the parties with respect to the subject matter
hereof and, except as provided herein, no interpretation, change,
termination or waiver of or extension of time for performance under any
provision of this Agreement shall be binding upon any party unless in
writing and signed by the party intended to be bound thereby. Receipt
by any party of money or other consideration due under this Agreement,
with or without knowledge of breach, shall not constitute a waiver of
such breach or any provision of this Agreement. Except as otherwise
provided in this Agreement, no waiver of or other failure to exercise
any right under, or default or extension of time for performance under,
any provision of this Agreement shall affect the right of any party to
exercise any subsequent right under or otherwise enforce said provision
or any other provision hereof or to exercise any right or remedy in the
event of any other default, whether or not similar.
6
<PAGE> 7
8.09 Relationship. Nothing contained in this Agreement shall be deemed to
create a partnership or joint venture between the parties, and each of
the parties shall in all matters connected herewith be independent
contractors. Neither of the parties hereto shall hold itself out as the
agent of the other, nor shall either of the parties incur any
indebtedness or obligation in the name of, or which shall be binding on
the other, without the prior written consent of the other. No
employees, agents, or sales representatives of either party shall be
deemed employees, agents or sales representatives of the other party.
8.10 Section Headings; Construction. The section headings and titles
contained herein are each for reference only and shall not be deemed to
affect the meaning or interpretation of this Agreement. The words
"hereby", "herein", "hereinabove", "hereinafter", "hereof" and
"hereunder, when used anywhere in this Agreement, refer to this
Agreement as a whole and not merely to a subdivision in which such
words appear, unless the context otherwise requires. The singular shall
include the plural, the conjunctive shall include the disjunctive and
the masculine gender shall include the feminine and neuter, and vice
versa, unless the context otherwise requires.
8.11 Execution Counterparts. This Agreement may be executed in any number of
counterparts and each duplicate counterpart shall constitute an
original, any one of which may be introduced in evidence or used for
any other purpose without the production of its duplicate counterpart.
Moreover, notwithstanding that any of the parties did not execute the
same counterpart, each counterpart shall be deemed for all purposes to
be an original, and all such counterparts shall constitute one and the
same instrument, binding on all of the parties hereto.
8.12 Consents and Approval. Unless otherwise expressly provided herein and
subject to the provisions of Section 6.04 above, whenever in this
Agreement a consent or approval is to be given by any party hereto,
such consent or approval may be given or withheld, as the case may be,
in the sole and absolute discretion of such party.
ARTICLE IX. BINDING EFFECT, ASSIGNMENT
9.01 Binding Effect, Assignment. This Agreement shall inure to the benefit
and be binding upon each of the parties hereto and their respective
successors and assigns. Neither this Agreement, nor any of the rights
and obligations under this Agreement, may be assigned, transferred or
otherwise disposed of by either party without the prior consent of the
other party, unless such assignment, transfer or disposition is to a
successor to all the business and assets of the transferor; provided
that, such successor shall in any event agree in writing with the other
party to assume all obligations of the transferor under this Agreement
in a manner satisfactory to the other party. Subject to the foregoing
limitations, the Agreement shall be binding upon and to the benefit of
the respective successors and assigns of the parties. Notwithstanding
the above, Reico may at all times and at its sole discretion transfer
and assign this Agreement and its rights and obligations thereunder to
NuRIGS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officer hereunto duly authorized as of the date first
written hereinabove.
NEOPROBE CORPORATION Reico LTD.
By: /s/ David C. Bupp /s/ Zwi Vromen
------------------------------ ---------------------
David C. Bupp, President & CEO Zwi Vromen, President
DCB:bg
<PAGE> 1
Exhibit 10.2.53
SCHEDULE IDENTIFYING OMITTED DOCUMENTS
The only particulars in which the attached agreement differs from the
omitted agreements is the name of the employee who is a party to the agreements
and the number of options granted subject to the agreements.
Name Number of Options Granted
---- -------------------------
Brent L. Larson 60,000
Carl Bosch 45,000
<PAGE> 2
NEOPROBE CORPORATION
SUITE 300
425 METRO PLACE NORTH
DUBLIN, OHIO 43017-1367
January 4, 2000
David C. Bupp
5747 Rushwood Drive
Dublin, OH 43017
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: 180,000.
2. EXERCISE PRICE. The exercise price to purchase Shares under this
Option is: $0.50 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 (January 4, 2000) if you have been an Employee of the Company
continuously from the date of this Agreement shown above through the
date when such portion of the Option vests.
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 an Employee because of
your death or disability,
(iii) 90 days after your employment with Neoprobe or any
Subsidiary is terminated by Neoprobe or such
Subsidiary without cause or by your resignation or
retirement.
(iv) immediately upon termination of your employment with
Neoprobe or any Subsidiary by Neoprobe for cause.
5. TAXATION. This Option is a Nonqualified Option. 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 (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.
<PAGE> 3
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 CFO.
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: /s/ Brent L. Larson
--------------------------------------
Brent L. Larson
Vice President, Finance &
Chief Financial Officer
Accepted and Agreed to as of
the date first set forth above:
/s/ David C. Bupp
- -------------------
Employee Signature
<PAGE> 4
OPTION EXERCISE FORM
The undersigned hereby exercises the right to purchase ________________________
shares of Common Stock of Neoprobe Corporation pursuant to the Option Agreement
dated January 4, 2000 under the Neoprobe Corporation 1996 Stock Incentive Plan.
Date: __________________________________ ________________________________
Employee Signature
________________________________________
Officer Approval
Sign and complete this Option Exercise Form and deliver it to:
Neoprobe Corporation
Attn: Treasurer
425 Metro Place North
Suite 300
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.
<PAGE> 1
Exhibit 10.2.54
SCHEDULE IDENTIFYING OMITTED DOCUMENTS
The only particulars in which the attached agreement differs from the
omitted agreements is the name of the employee who is a party to the agreements
and the number of restricted shares subject to the agreements.
Name Number of Restricted Shares
---- ---------------------------
Brent L. Larson 40,000
Carl Bosch 30,000
<PAGE> 2
EXHIBIT 10.2.54
NEOPROBE CORPORATION
SUITE 400
425 METRO PLACE NORTH
DUBLIN, OHIO 43017-1367
March 22, 2000
David C. Bupp
5747 Rushwood Drive
Dublin, Ohio 43017
Congratulations. You have been granted a right to purchase Restricted Stock
under Neoprobe's 1996 Stock Incentive Plan (the "Plan") on the following terms:
1. PURCHASE AND SALE. On the terms and subject to the conditions set forth
in this Agreement, you hereby subscribe for and agree to purchase
100,000 shares of Common Stock (the "Restricted Stock") for and in
consideration of a payment by you to Neoprobe of $0.001 per share.
2. TRANSFER RESTRICTIONS. The fair market value of Common Stock is
demonstrated by the closing price on the OTC Bulletin Board of such
securities on the business day before the date first set forth above
which was $1.25 per share. In consideration of the difference between
the purchase price of the Restricted Stock set forth in paragraph 1
above and its fair market value without the restrictions and risk of
forfeiture set forth herein, you agree that, unless and until any of
the Restricted Stock vests and becomes transferable as provided in
paragraph 4 below, you will neither transfer, sell, assign nor pledge
any of the Restricted Stock. Any certificate representing any
Restricted Stock issued hereunder will bear the following legend in
larger or other contrasting type or color: "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 March 22, 2000."
3. FORFEITURE. You 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, or (b) (except as otherwise provided in the
last sentence of this paragraph 3) immediately upon the termination of
your employment by Neoprobe, whether for cause or without cause, or
because of your death or disability, or by your resignation. If such a
forfeiture occurs, all of your right, title and interest in and to any
shares of Restricted Stock which have not previously vested and became
transferable will be terminated, the certificates representing the
forfeited shares will be canceled or transferred free and clear of all
restrictions to Neoprobe's treasury and we will pay you $0.001 per
share for each share of Restricted Stock so forfeited. Notwithstanding
clause (b) of this paragraph 3 no forfeiture will occur upon the
termination of your employment by Neoprobe without cause, or because of
your death or disability, if at the time of such termination Neoprobe
is engaged in active negotiations that could reasonably be expected to
result in a change in control.
4. VESTING PROVISIONS. Any Restricted Stock that has not previously been
forfeited under Section 3 above will vest and become transferable if
and when a Change in Control (as defined below in Section 5) of
Neoprobe occurs or upon the termination of your employment by Neoprobe
without cause, or because of your death or disability, if at the time
of such termination Neoprobe is engaged in active negotiations that
could reasonably be expected to result in a Change in Control; provided
the Committee certifies such occurrence in its minutes or another
writing promptly thereafter. Notwithstanding any provision of this
Agreement or any provision of the Plan, including, but not limited to,
the last sentence of Section 7.1 thereof and Section 8.3 thereof, the
provisions of which are hereby waived by you, the Committee may, if it
determines in its sole discretion that your actions in connection with
any Change in Control which results in the vesting of any shares of
Restricted Stock
<PAGE> 3
hereunder were not in accordance with your duties to Neoprobe and its
stockholders as a director, officer or employee of Neoprobe or your
actions did not fully support the determinations of the Board of
Directors of Neoprobe in connection therewith, reduce the number of
share of Restricted Stock which vest under this Agreement or eliminate
such vesting entirely. When any portion of the Restricted Stock vests
and becomes transferable, Neoprobe will, subject to the provision of
Section 6 below, promptly deliver a certificate (free of all adverse
claims and transfer) representing the number of shares constituting the
vested and transferable portion of the Restricted Stock to you at your
address given above and such shares will no longer be deemed to be
Restricted Stock subject to the terms and conditions of this Agreement.
5. CHANGE IN CONTROL. For the purpose of this Agreement, a Change in
Control of Neoprobe has occurred when: (a) any person (defined for the
purposes of this Section 3 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 thirty percent (30%) 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 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.
6. 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, you 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 Neoprobe which dividends or distributions will be delivered
to Neoprobe under the same restrictions on transfer and possibility of
forfeitures as the shares of Restricted Stock from which they derive.
7. 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 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 certificates representing vested shares of Restricted
Stock to you.
8. 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 to you.
9. 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. Except as otherwise expressly set forth
-2-
<PAGE> 4
herein, 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 principal
financial officer.
10. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement will 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 will govern the dispute. If the amount
claimed exceeds $100,000, the arbitration will be before a panel of
three arbitrators. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. Neoprobe will indemnify you against, and
hold you harmless from, any attorney's fees, court costs and other
expenses incurred by you 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 hereunder after the occurrence of a Change in
Control of Neoprobe or under this sentence; without regard to the
success of you or your attorney in any such arbitration or proceeding.
11. 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 and 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 are found to be
illegal or unenforceable in any respect, the validity and
enforceability of the remaining provisions hereof will not in any way
be affected or impaired thereby. This Agreement will 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: /s/ Brent L. Larson
------------------------------
Brent L. Larson
Vice President, Finance - CFO
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST SET FORTH ABOVE:
/s/ David C. Bupp
- --------------------------------
David. C. Bupp
-3-
<PAGE> 1
Exhibit 10.2.55
AGREEMENT, RELEASE AND WAIVER
THIS AGREEMENT, RELEASE AND WAIVER (the "Agreement") is a contract
between the undersigned employee ("you") who is being involuntarily and without
cause, separated from employment on March 31, 2000 (the "Effective Date of
Termination") and your employer, Neoprobe Corporation ("Neoprobe").
WHEREAS, Neoprobe is eliminating substantially all in-house sales and
marketing activities and as a result your job is affected;
WHEREAS, the Parties desire to fully and completely settle and dispose
of any and all claims of whatever kind or nature which you ever had, may now
have or may hereafter have against Neoprobe, whether known or unknown;
NOW THEREFORE, the Parties hereto agree as follows:
1. BENEFITS: In consideration for signing this Agreement, you will receive
the following benefits (the "Severance Benefits").
A. SEVERANCE PAY: Neoprobe agrees to pay you a lump sum payment
of $200,417 which is equal to thirteen (13) months based on
your current annual salary. Unless otherwise instructed by
you, this amount shall be paid on April 15, 2000.
B. NEOPROBE PROPERTY: You shall be entitled to retain the
following Neoprobe property: desk lamp and the "Personal
Computer" provided to you by Neoprobe, provided that you
certify in writing to Neoprobe that you have deleted all
confidential and proprietary Neoprobe information according to
instructions provided to you by Neoprobe. Once Neoprobe
receives the certification, the computer shall not be
considered "Neoprobe property" within the meaning of Paragraph
10(ii) below. As used herein the term "Personal Computer"
means the CPU, Monitor, Key Board, Printer and Mouse. Employee
and Neoprobe shall mutually agree to the timing of the removal
of the above-described items from the premises of Neoprobe.
2. COBRA. You acknowledge receipt of notice of your right to elect
continued health care coverage in accordance with the provisions of the
federal Consolidated Omnibus Budget & Reconciliation Act, as amended
("COBRA"). In the event that you exercise your COBRA right to continue
coverage under Neoprobe's group health insurance policy, Neoprobe
agrees to continue to pay a portion of the premiums for such coverage
in the amount of $564.03 per month through December 31, 2000. Your
portion of the premiums will be $75.00 per month during this period.
Thereafter, if you wish to continue such coverage for the remainder of
the 9 month COBRA period, you must do so completely at your own
expense.
3. CHANGE OF CONTROL SEVERANCE. You will be entitled to receive additional
severance benefits as follows:
In the event of a "Change of Control" (as that term is defined in the
Severance Agreement dated October 23, 1998, a copy of which is attached
as Exhibit A) of Neoprobe occurs within eight (8) months of the
Effective Date of Termination, you shall be entitled to receive an
additional severance payment of $92,500, equal to six (6) months of
your annual base salary as of the Effective Date of Termination.
Unless otherwise agreed to by the Parties, the severance payment
described in this Paragraph 4 shall be paid in a lump sum within
fifteen (15) days of the Change of Control event. Unless otherwise
agreed to by the Parties, the severance payment described in this
Paragraph 3 shall be paid in a lump sum within fifteen (15) days of the
Change of Control event. Any Change of Control transaction begun during
the period described in Paragraph 3 and which is completed within four
(4) months thereafter shall be considered to be within the applicable
period stated in this Paragraph 3. As an example, if a Change of
Control transaction described in Paragraph 3 began on October 31, 2000
but did not close until February 1, 2001, you would be entitled to
receive the severance payment specified in Paragraph 3.
<PAGE> 2
4. CHANGE OF CONTROL LIFE AND HEALTH BENEFITS. In the event of a Change of
Control of Neoprobe as described in Paragraph 3 above, you shall be
eligible to continue to participate in the life and health insurance
programs of Neoprobe or participate in the life and health insurance
programs of the controlling Person for the remainder of COBRA period
available to you if any; provided that Neoprobe makes no
representations that it will have a group health plan or that the
controlling Person will agree to include you under its group health
plan; further provide that Neoprobe will use its best efforts to
require the controlling Person to honor the provisions of this
Paragraph 4.
5. 401(k) PLAN. You shall receive all monies to which Employee is entitled
under Neoprobe's 401(k) Plan in accordance with the terms thereof.
6. UNEMPLOYMENT BENEFITS. Neoprobe agrees not to contest any claim for
unemployment benefits, which Employee might file as a result of
Employee's separation from Neoprobe on March 31, 2000. However,
Neoprobe expressly waives any commitment that it is warranting or
guaranteeing Employee's receipt of such unemployment benefits inasmuch
as that determination is solely within the province of the Ohio Bureau
of Employment Services.
7. STOCK OPTIONS. Neoprobe agrees that you shall be eligible to exercise
any stock options to which Employee may be entitled under the Neoprobe
Stock Purchase Plan in accordance with the terms thereof.
8. INSURANCE. Employee's coverage under Neoprobe's disability insurance
plan shall terminate as of March 31, 2000, and you may have the right
to convert such coverage to your own individual plan if provided for
under, and in accordance with, the terms of, such plan. Your coverage
under Neoprobe's life insurance plan shall terminate as of December 31,
2000 and you may have the right to convert such coverage to your own
individual plan if provided for under, and in accordance with, the
terms of, such plan.
9. RELEASE. In consideration for the Severance Benefits specified
in Paragraph 1 above as well as the other benefits set forth herein,
you hereby release and discharge Neoprobe Corporation, its
subsidiaries, affiliates, successors and assigns and their respective
directors, officers, employees and agents (hereinafter collectively
referred to as "Releases"), both individually and in their official
capacity, from all claims, actions and causes of action of any kind,
which you, or your agents, executors, heirs, or assigns ever had, now
have, or may have, whether known or unknown, as a result of your
employment by or termination of employment from Neoprobe. With the
exception of any action that the law prevents an employee from waiving
by agreement, your covenants and releases set forth in this Agreement
include a waiver of any and all rights or remedies which you ever had,
may now have or may hereafter have against Neoprobe in tort or in
contract, or under any present or future federal, state or local
statute or law, including, but not limited to: any action or cause of
action asserted or which could have been asserted under Ohio's Laws
Against Discrimination, O.R.C. Chapter 4112; O.R.C. Section 4101.17;
Title VII of the 1964 Civil Rights Act, 42 U.S.C. Section 2000e, et
seq.; the 1866 Civil Rights Act, 42 U.S.C. Section 1981; the Civil
Rights Act of 1991, PL. 102-166; the 1967 Age Discrimination in
Employment Act, 29 U.S.C. Section 621, et seq., as amended by the Older
Workers Benefit Protection Act; the Americans with Disabilities Act, 42
U.S.C. Section 12101, et seq.; the Fair Labor Standards Act of 1938, 29
U.S.C. Section 201, et seq.; the Equal Pay Act, 29 U.S.C. Section
206(d); the Family and Medical Leave Act of 1993, 29 U.S.C. Section
2601, et seq.; the Occupational Safety and Health Act of 1970, 29
U.S.C. Section 553, et seq.; the Employee Retirement Income Security
Act of 1974, 29 U.S.C. Section 1001, et seq.; the Consolidated Omnibus
Budget Reconciliation Act of 1986, 29 U.S.C. Section 1161, et seq.;
Ohio's Workers' Compensation Law; any claims for wrongful discharge,
unjust dismissal, or constructive discharge; any claims for breach of
any alleged oral, written or implied contract of employment; any claims
for emotional distress or other torts; any claims for salary, severance
payments, bonuses or other compensation of any kind; any claims for
benefits; claims for libel, slander defamation and attorneys' fees; and
any other claims under federal, state, or local statute, law, rule or
regulation. BY SIGNING THIS AGREEMENT, YOU GIVE UP ANY RIGHT YOU MAY
HAVE TO BRING A LAWSUIT OR RECEIVE A RECOVERY ON ANY CLAIM AGAINST
NEOPROBE AND THOSE ASSOCIATED WITH NEOPROBE BASED ON ANY ACTIONS,
FAILURES TO ACT, STATEMENTS, OR EVENTS OCCURRING PRIOR TO THE DATE OF
THIS
2
<PAGE> 3
AGREEMENT, INCLUDING CLAIMS THAT IN ANY WAY ARISE FROM OR RELATE TO
YOUR EMPLOYMENT WITH NEOPROBE OR THE TERMINATION OF THAT EMPLOYMENT,
WITH THE EXCEPTION OF ANY CLAIM THAT NEOPROBE BREACHED ITS COMMITMENTS
UNDER THIS AGREEMENT.
10. RETURN OF NEOPROBE PROPERTY. Whether or not you sign this Agreement,
you, as a terminating employee, are reminded that you must return to
Neoprobe, (i) all Neoprobe documents, and other tangible items, and any
copies, that are in your possession or control and which contain
confidential information in written, magnetic or other form and shall
have not given such documents, items, or copies to anyone other than
another Neoprobe employee; and (ii) subject to the provisions of
Paragraph 1(B) herein, all other Neoprobe property within Employee's
possession including, but not limited to, office keys, identification
badges or passes, Neoprobe credit cards, and computer equipment and
software.
11. NEOPROBE PROPRIETARY INFORMATION AGREEMENT. Whether or not you sign
this Agreement, you, as a terminating employee, are reminded that the
Proprietary Information Agreement (the "Proprietary Agreement") entered
into between Neoprobe and yourself remains in full force and effect
after termination of your employment. Under the Proprietary Agreement,
you have a continuing obligation to maintain the confidentiality of all
confidential, proprietary and trade secret information which you
obtained during your employment with Neoprobe.
12. DUTY OF CONFIDENTIALITY. You recognize that Neoprobe possesses certain
business and financial information about its operations, information
about new or envisioned products or services, manufacturing methods,
product research, product specifications, records, plans, prices,
costs, customer lists, concepts and ideas, and is the owner of
proprietary rights in certain systems, methods, processes, procedures,
technical and non-technical information, inventions, machinery,
research and other things which constitute valuable trade secrets of
Neoprobe. You acknowledge that you have been employed in positions in
which you have had access to such information and that Neoprobe has a
legitimate interest in protecting such confidential and proprietary
information in order to maintain and enhance a competitive edge within
its industry. Accordingly, you agree that you will not use or remove,
duplicate or disclose, directly or indirectly, to any persons or
entities outside Neoprobe any information, property, trade secrets or
other things of value which have not been publicly disclosed. In the
event that you are requested or required in a judicial, administrative
or governmental proceeding to disclose any information that is the
subject matter of this Paragraph 11, you will provide Neoprobe with
prompt written notice of such request and all related proceedings so
that Neoprobe may seek an appropriate protective order or remedy or, as
soon as practicable, waive your compliance with the provisions of this
Paragraph 11. You acknowledge that you have carefully considered the
nature and extent of the restrictions upon him and the rights and
remedies conferred to Neoprobe under this Paragraph 10 and hereby agree
that the same are reasonably designed to eliminate competition which
otherwise would be unfair to Neoprobe, do not stifle the inherent skill
and experience of you, would not operate as a bar to your sole means of
support, are fully required to protect the legitimate interests of
Neoprobe and do not confer a benefit upon Neoprobe disproportionate to
the detriment of you.
13. BREACH. If you agree that if you violate any part of this Agreement or
your Proprietary Agreement, you will not be entitled to the Severance
Benefits described herein. You further agree that any breach or
threatened breach by you of this Agreement cannot be remedied solely by
the recovery of damages and Neoprobe shall therefore be entitled to an
injunction against such breach or threatened breach without posting any
bond or other security. Nothing herein, however, shall be construed as
prohibiting Neoprobe from pursuing all its available rights, in law or
equity for such breach or threatened breach, including the recovery of
damages. In the event that you breach any of the promises made in this
Agreement, and Neoprobe defends or pursues any charge, suit, complaint,
claim or grievance as a result thereof, you shall be liable to Neoprobe
for all damages, attorneys' fees, expenses and costs (including
discovery costs) incurred by Neoprobe in defending or pursuing the
same.
3
<PAGE> 4
14. CONFIDENTIALITY OF THIS AGREEMENT: You agree that you will not reveal
the existence of this Agreement, nor any terms thereof, to any person,
entity, or organization, except to his immediate family, to his
attorney, or as may be required by law. Neoprobe agrees that it will
not reveal the existence of this Agreement, nor any terms thereof, to
any person, entity, or organization, except to employees of Neoprobe
who have a need to know or as may be required by law.
15. PERIOD OF REVIEW AND OTHER CONSIDERATIONS:
A. DATE OF RECEIPT. You acknowledge that you received this
Agreement on or prior to February 28, 2000.
B. ATTORNEY CONSULTATION. You acknowledge that you have had the
opportunity to consult an attorney of your choice concerning
this Agreement, Release and Waiver.
C. Period of Review. You acknowledge that you have been given at
least 21 days in which to review and consider signing this
Agreement. In the event you execute this Agreement within less
than 21 days of the date of its delivery to you, you
acknowledge that such decision was entirely voluntary and that
he has had the opportunity to consider this Agreement for the
entire 21-day period but decided to waive that opportunity.
D. ENTIRE AGREEMENT. This Agreement, Release and Waiver, sets
forth the entire agreement between Neoprobe and yourself and
supersedes and renders null and void any and all prior or
contemporaneous oral or written understandings, statements,
representations or promises, including the Severance Agreement
dated October 23, 1998 attached as Exhibit A. This Agreement
does not, however, supersede the Proprietary Information
Agreement, which remains in full force and effect.
E. GOVERNING LAW. This Agreement shall be construed and governed
by the laws of the State of Ohio and adjudicated within the
exclusive jurisdiction of the courts having jurisdiction over,
Franklin County, Ohio.
F. REVOCATION OF AGREEMENT, RELEASE AND WAIVER. You understand
that you have the right to revoke this Agreement within seven
(7) days of your signing it, and that this Agreement shall not
become effective or enforceable until this seven (7) day
period has expired. To revoke this Agreement, Release and
Waiver, you agree to notify in writing, the Human Resources
Dept., Neoprobe Corporation, 425 Metro Place North, Suite 300,
Dublin, OH 43017. Unless so revoked, this Agreement will be
effective at 5:00 p.m. on suc seventh day. You agree that if
you exercise your right to revoke this Agreement within seven
(7) days, your termination of employment will nevertheless
occur, you will not be entitled to the Severance Benefits, and
you will immediately return to Neoprobe any consideration you
have already received.
YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ AND FULLY UNDERSTAND ALL THE
PROVISIONS OF THIS AGREEMENT, RELEASE AND WAIVER, AND YOU ARE ENTERING INTO THIS
AGREEMENT VOLUNTARILY. YOU ACKNOWLEDGE THAT THE CONSIDERATION YOU ARE RECEIVING
IN EXCHANGE FOR EXECUTING THIS AGREEMENT IS GREATER THAN THAT WHICH YOU WOULD BE
ENTITLED TO IN THE ABSENCE OF THIS AGREEMENT. YOU HAVE NOT RELIED UPON ANY
REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN THIS AGREEMENT.
WHEREFORE, the parties have read all of the foregoing, understand the
same, and agree to all of the provisions contained herein.
4
<PAGE> 5
NEOPROBE CORPORATION EMPLOYEE
By: /s/ David C. Bupp By: /s/ Matthew F. Bowman
------------------------ ------------------------
David C. Bupp Matthew F. Bowman
President & CEO
Dated: March 2, 2000 Dated: 3/2/00
------------------------ ------------------------
5
<PAGE> 1
Exhibit 10.2.56
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of
April 1, 2000 ("Effective Date), by and between NEOPROBE CORPORATION, a Delaware
Corporation with a place of business at 425 Metro Place North, Suite 300,
Dublin, Ohio 43017-1367 (the "Company") and CARL BOSCH of Worthington, Ohio (the
"Employee").
WHEREAS, the Company and the Employee entered into an Employment
Agreement dated as of October 1, 1999 (the "1999 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
Vice-President, Instrument Development in such equivalent, additional
or higher level position or positions as shall be assigned to him by
the Chief Executive Officer of the Company. While serving in such
position, the Employee shall report to, be responsible to, and shall
take direction from 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 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.
2. TERM OF THIS EMPLOYMENT AGREEMENT. Subject to Sections 4 and 5 hereof,
the Term of this Employment Agreement shall be for an initial period of
eighteen (18) months commencing April 1, 2000 and terminating September
30, 2001.
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 of this
Employment Agreement, the Company shall pay the Employee a
salary of One Hundred Twenty-Seven Thousand Five Hundred
Dollars ($127,500) per year, payable in semi-monthly or
monthly installments.
B. BONUS. The Chief Executive Officer of the Company will, on an
annual basis, review the performance of the Employee and the
Company 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
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.
<PAGE> 2
E. VACATION. The Employee shall be entitled to twenty (20) days
of vacation during each calendar year during the Term of this
Employment Agreement.
F. EXPENSES. The Company shall reimburse the Employee for all
reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder, including expenses for
travel, entertainment and similar items, promptly after the
presentation by the Employee, from time-to- time, of an
itemized account of such expenses.
4. TERMINATION.
A. FOR CAUSE. The Company may terminate the employment of the
Employee prior to the end of the Term of this Employment
Agreement for cause. 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.
B. RESIGNATION. If the Employee resigns for any reason, all
salary, benefits and other payments (except as otherwise
provided in paragraph G of this Section 4 below) shall cease
at the time such resignation become effective. At the time of
any such resignation, the Company shall pay the Employee the
value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the
date of such termination. The Company shall promptly reimburse
the Employee for the amount of any expenses incurred prior to
such termination by the Employee as required under paragraph F
of Section 3 above.
C. DISABILITY, DEATH. 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 in
order to obtain such opinion at the request of the Company.
Such examination shall be paid for by the Company and shall be
performed by a licensed physician designated 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 C shall not be deemed to be a
termination for cause.
If during the Term of this Employment Agreement, the Employee
dies or his employment is terminated because of his
disability, all salary, benefits and other payments shall
cease at the time of death or disability. At the time of any
such termination, the Company shall pay the Employee, the
value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the
date of such termination. The Company shall promptly reimburse
the Employee for the amount of any expenses incurred prior to
such termination by the Employee as required under paragraph F
of Section 3 above.
D. TERMINATION WITHOUT CAUSE. A termination without cause is a
termination of the employment of the Employee by the Company
that is not "for cause" and not occasioned by the resignation,
death or disability of the Employee. If the Company terminates
the employment of the Employee without cause, (whether before
the end of the Term of this Employment Agreement or, if the
Employee is employed by the Company under paragraph E of this
Section 4 above, after the Term of this Employment Agreement
has ended) the Company shall, at the time of such termination,
pay tot the Employee the severance payment provided in
paragraph F of this Section 4 below together with the value of
any accrued but unused vacation time and the amount of all
accrued but previously unpaid base salary through the date of
such termination and shall provide him with all of this
benefits under paragraph C of Section 3 above for the full
unexpired Term of this Employment Agreement. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
<PAGE> 3
If the Company terminates the employment of the Employee
because it has ceased to do business or substantially
completed the liquidation of its assets or because it has
relocated to another city and the Employee has decided not to
relocate also, such termination of employment shall be deemed
to be without cause.
E. END OF THE TERM OF THIS EMPLOYMENT AGREEMENT. If Employee is
employed by the Company on September 30, 2000, the Company
shall pay him a retention bonus of Twenty Four Thousand
Dollars ($24,000) on the next business day. Except as
otherwise provided in paragraphs F and G of this Section 4
below, the Company may terminate the employment of the
Employee at the end of the Term of this Employment Agreement
without any liability on the part of the Company to the
Employee but, if the Employee continues to be an employee of
the Company after the Term of this Employment Agreement ends,
his employment shall be governed by the terms and conditions
of this Agreement, but he shall be an employee at will and his
employment may be terminated at any time by either the Company
or the Employee without notice and for any reason not
prohibited by law or no reason at all. If the Company
terminates the employment of the Employee at the end of the
Term of this Employment Agreement, the Company shall, at the
time of such termination, pay to the Employee the severance
payment provided in paragraph F of this Section 4 below
together with the value of any accrued but unused vacation
time and the amount of all accrued but previously unpaid base
salary through the date of such termination. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
F. SEVERANCE. If the employment of the Employee is terminated by
the Company, at the end of the Term of this Employment
Agreement or, without cause (whether before the end of the
Term of this Employment Agreement or, if the Employee is
employed by the Company under paragraph E of this Section 4
above, after the Term of this Employment Agreement has ended),
the Employee shall be paid, as a severance payment at the time
of such termination, the amount of One Hundred Twenty-Seven
Thousand Five Hundred Dollars ($127,500). If any such
termination occurs at or after the substantial completion of
the liquidation of the assets of the Company, the severance
payment shall be increased by adding Thirty-One Thousand Eight
Hundred Seventy-Five Dollars ($31,875) to such amount. The
amount of the retention bonus paid to the employee under
paragraph E of this Section 4 shall be subtracted from any
severance payment made to the Employee on account of any
termination of employment that occurs on or within ninety days
after the end of the Term of this Employment Agreement.
G. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans
(paragraphs C of Section 3 above) but in lieu of any severance
payment under paragraph F of this Section 4 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, that his services are no
longer required in light of the Company's business plan, or
the Company has breached this Employment Agreement, the
Company shall pay the Employee, as a severance payment, at the
time of such termination, the amount of One Hundred Ninety-One
Thousand Two Hundred Fifty Dollars ($191,250) together with
the value of any accrued but unused vacation time, and the
amount of all accrued but previously unpaid base salary
through the date of termination and shall provide him with all
of this benefits under paragraph C of Section 3 above for the
longer of six (6) months or the full unexpired Term of this
Employment Agreement. If any such termination occurs at or
after the substantial completion of the liquidation of the
assets of the Company, the severance payment shall be
increased by adding Thirty-One Thousand Eight Hundred
Seventy-Five Dollars ($31,875) to such amount. The Company
shall promptly reimburse the Employee for the amount of any
expenses incurred prior to such termination by the Employee as
required under paragraph F of Section 3 above.
<PAGE> 4
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 G 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 eight 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. The parties hereto agree that for the purpose of
determining the time when a Change of Control has occurred
that if any transaction results from a definite proposal that
was made before the end of the Term of this Employment
Agreement but which continued until after the end of the Term
of this Employment Agreement and such transaction is
consummated after the end of the Term of this Employment
Agreement, such transaction shall be deemed to have occurred
when the definite proposal was made for the purposes of the
first sentence of this paragraph G of this Section 4.
H. BENEFIT AND STOCK PLANS. In the event that a benefit plan or
Stock Plan which covers the Employee has specific provisions
concerning termination of employment, or 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 the benefits or stock options.
5. 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.
6. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for one (1) year
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, 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
<PAGE> 5
banking or related financial services industries nor from
investing his personal assets in the securities or 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) 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 6 shall terminate
immediately upon the substantial completion of the liquidation
of assets of the Company or the termination of the employment
of the Employee by the Company without cause or at the end of
the Term of this Employment Agreement.
7. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
8. 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.
9. ENTIRE AGREEMENT. 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.
10. 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 deliverd this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: /s/ David C. Bupp /s/ Carl Bosch
----------------------------- -----------------------------
David C. Bupp, President Carl Bosch
<PAGE> 1
Exhibit 10.2.57
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of
April 1, 2000 ("Effective Date), by and between NEOPROBE CORPORATION, a Delaware
Corporation with a place of business at 425 Metro Place North, Suite 300,
Dublin, Ohio 43017-1367 (the "Company") and BRENT LARSON of Dublin, Ohio (the
"Employee").
WHEREAS, the Company and the Employee wish to establish 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 Vice-
President, Finance and Chief Financial Officer, in such equivalent,
additional or higher level position or positions as shall be assigned
to him by the Chief Executive Officer of the Company. While serving in
such position, the Employee shall report to, be responsible to, and
shall take direction from 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 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.
2. TERM OF THIS EMPLOYMENT AGREEMENT. Subject to Sections 4 and 5 hereof,
the Term of this Employment Agreement shall be for an initial period of
eighteen (18) months commencing April 1, 2000 and terminating September
30, 2001.
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 of this
Employment Agreement, the Company shall pay the Employee a
salary of One Hundred Thirty Thousand Dollars ($130,000) per
year, payable in semi-monthly or monthly installments.
B. BONUS. The Compensation Committee of the Company will, on an
annual basis, review the performance of the Employee and the
Company 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. VACATION. The Employee shall be entitled to twenty (20) days
of vacation during each calendar year
<PAGE> 2
during the Term of this Employment Agreement.
F. EXPENSES. The Company shall reimburse the Employee for all
reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder, including expenses for
travel, entertainment and similar items, promptly after the
presentation by the Employee, from time-to-time, of an
itemized account of such expenses.
4. TERMINATION.
A. FOR CAUSE. The Company may terminate the employment of the
Employee prior to the end of the Term of this Employment
Agreement for cause. 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.
B. RESIGNATION. If the Employee resigns for any reason, all
salary, benefits and other payments (except as otherwise
provided in paragraph G of this Section 4 below) shall cease
at the time such resignation become effective. At the time of
any such resignation, the Company shall pay the Employee the
value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the
date of such termination. The Company shall promptly reimburse
the Employee for the amount of any expenses incurred prior to
such termination by the Employee as required under paragraph F
of Section 3 above.
C. DISABILITY, DEATH. 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 in
order to obtain such opinion at the request of the Company.
Such examination shall be paid for by the Company and shall be
performed by a licensed physician designated 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 C shall not be deemed to be a
termination for cause.
If during the Term of this Employment Agreement, the Employee
dies or his employment is terminated because of his
disability, all salary, benefits and other payments shall
cease at the time of death or disability. At the time of any
such termination, the Company shall pay the Employee, the
value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the
date of such termination. The Company shall promptly reimburse
the Employee for the amount of any expenses incurred prior to
such termination by the Employee as required under paragraph F
of Section 3 above.
D. TERMINATION WITHOUT CAUSE. A termination without cause is a
termination of the employment of the Employee by the Company
that is not "for cause" and not occasioned by the resignation,
death or disability of the Employee. If the Company terminates
the employment of the Employee without cause, (whether before
the end of the Term of this Employment Agreement or, if the
Employee is employed by the Company under paragraph E of this
Section 4 above, after the Term of this Employment Agreement
has ended) the Company shall, at the time of such termination,
pay to the Employee the severance payment provided in
paragraph F of this Section 4 below together with the value of
any accrued but unused vacation time and the amount of all
accrued but previously unpaid base salary through the date of
such termination and shall provide him with all of this
benefits under paragraph C of Section 3 above for the full
unexpired Term of this Employment Agreement. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
If the Company terminates the employment of the Employee
because it has ceased to do business or substantially
completed the liquidation of its assets or because it has
relocated to another city and the
<PAGE> 3
Employee has decided not to relocate also, such termination of
employment shall be deemed to be without cause.
E. END OF THE TERM OF THIS EMPLOYMENT AGREEMENT. Except as
otherwise provided in paragraphs F and G of this Section 4
below, the Company may terminate the employment of the
Employee at the end of the Term of this Employment Agreement
without any liability on the part of the Company to the
Employee but, if the Employee continues to be an employee of
the Company after the Term of this Employment Agreement ends,
his employment shall be governed by the terms and conditions
of this Agreement, but he shall be an employee at will and his
employment may be terminated at any time by either the Company
or the Employee without notice and for any reason not
prohibited by law or no reason at all. If the Company
terminates the employment of the Employee at the end of the
Term of this Employment Agreement, the Company shall, at the
time of such termination, pay to the Employee the severance
payment provided in paragraph F of this Section 4 below
together with the value of any accrued but unused vacation
time and the amount of all accrued but previously unpaid base
salary through the date of such termination. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
F. SEVERANCE. If the employment of the Employee is terminated by
the Company, at the end of the Term of this Employment
Agreement or, without cause (whether before the end of the
Term of this Employment Agreement or, if the Employee is
employed by the Company under paragraph E of this Section 4
above, after the Term of this Employment Agreement has ended),
the Employee shall be paid, as a severance payment at the time
of such termination, the amount of One Hundred Forty Thousand
Eight Hundred Thirty-Three Dollars ($140,833). If any such
termination occurs at or after the substantial completion of
the liquidation of the assets of the Company, the severance
payment shall be increased by adding Thirty-Two Thousand Five
Hundred Dollars ($32,500) to such amount.
G. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans
(paragraphs C of Section 3 above) but in lieu of any severance
payment under paragraph F of this Section 4 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, that his services are no
longer required in light of the Company's business plan, or
the Company has breached this Employment Agreement, the
Company shall pay the Employee, as a severance payment, at the
time of such termination, the amount of One Hundred
Ninety-Five Thousand Dollars ($195,000) together with the
value of any accrued but unused vacation time, and the amount
of all accrued but previously unpaid base salary through the
date of termination and shall provide him with all of this
benefits under paragraph C of Section 3 above for the longer
of six (6) months or the full unexpired Term of this
Employment Agreement. If any such termination occurs at or
after the substantial completion of the liquidation of the
assets of the Company, the severance payment shall be
increased by adding Thirty-Two Thousand Five Hundred Dollars
($32,500) to such amount. The Company shall promptly reimburse
the Employee for the amount of any expenses incurred prior to
such termination by the Employee as required under paragraph F
of Section 3 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 G 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
<PAGE> 4
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 eight 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. The parties hereto agree that for
the purpose of determining the time when a Change of Control
has occurred that if any transaction results from a definite
proposal that was made before the end of the Term of this
Employment Agreement but which continued until after the end
of the Term of this Employment Agreement and such transaction
is consummated after the end of the Term of this Employment
Agreement, such transaction shall be deemed to have occurred
when the definite proposal was made for the purposes of the
first sentence of this paragraph G of this Section 4.
H. BENEFIT AND STOCK PLANS. In the event that a benefit plan or
Stock Plan which covers the Employee has specific provisions
concerning termination of employment, or 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 the benefits or stock options.
5. 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.
6. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for one (1) year
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, 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 or 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) intraoperative detection of cancer and/or (2)
Activated Cellular Therapy for cancer, or
<PAGE> 5
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 6 shall terminate immediately
upon the substantial completion of the liquidation of assets of the
Company or the termination of the employment of the Employee by the
Company without cause or at the end of the Term of this Employment
Agreement.
7. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
8. 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.
9. ENTIRE AGREEMENT. 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.
10. 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 deliverd this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: /s/ David C. Bupp /s/ Brent L. Larson
---------------------------- ----------------------------
David C. Bupp, President Brent L. Larson
<PAGE> 1
Exhibit 10.3.50
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT (the "Agreement"), dated January 19, 2000, by
and between BIOMEDICAL INVESTMENTS (1997) LTD, an Israeli Company ("Buyer"), and
NEOPROBE CORPORATION, a Delaware corporation ("Seller"):
Seller owns (beneficially and of record) the number of shares of Class
A Common Shares, par value $.020 per share ("Class A Common Shares") and Class A
Preferred Shares, par value $.020 per share ("Class A Preferred Shares"), of XTL
BIOPHARMACEUTICALS LTD. (the "Company"), set forth in Schedule I under the
captions "Number of Class A Common Shares" and "Number of Class A Preferred
Shares" (collectively, the "Shares").
Seller desires to sell and Buyer desires to purchase all of the Shares
owned by the Seller on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
other agreements contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly through one or more intermediary Persons, controlling,
controlled by or under common control with such Person.
"Articles of Association" shall mean the Articles of Association of the
Company, as amended to date, a copy of which is attached hereto as Exhibit A.
"Assets" shall mean properties, rights, interests and assets of every
kind, real, personal or mixed, tangible and intangible.
"Contract" shall mean any contract, agreement, indenture, note, bond,
lease, conditional sale contract, mortgage, license, franchise, instrument,
commitment or other binding arrangement.
"Governmental Body" shall mean any governmental or political
subdivision thereof, whether Israeli, local or foreign, or any instrumentality
of any such government or political subdivision.
"Investment Agreement" shall mean the Investment Agreement, dated as of
January 31, 1996, between Seller and the Company, a copy of which is attached
hereto as Exhibit B.
"Investor's Rights Agreement" shall mean the Investors' Rights
Agreement, dated as of February 5, 1996, between the Company and Seller, a copy
of which is attached hereto as Exhibit C.
"Letter Agreement" shall mean the letter agreement, dated as of August
1998, between the Company and Seller, a copy of which is attached hereto as
Exhibit D.
"Lien" shall mean, with respect to any Asset, any mortgage, lien
(including mechanics, warehouseman, laborers and landlord liens), claim, pledge,
charge, security interest, preemptive rights, rights of first refusal, option,
judgment, title defect, or encumbrance of any kind in respect of or affecting
such Asset.
"Person" shall mean any natural person, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, business trust,
governmental or political subdivision, regulatory body or other entity.
<PAGE> 2
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of August 1998, among the Company, Seller and the other
investors named therein, a copy of which is attached hereto as Exhibit E.
"Research and License Agreement" shall mean the Research and License
Agreement, dated as of February 13, 1996, between Seller and the Company, a copy
of which is attached hereto as Exhibit F.
"Sublicense Agreement" shall mean the Sublicense Agreement, dated as of
February 13, 1996, the Company and Seller, a copy of which is attached hereto as
Exhibit G.
ARTICLE II
PURCHASE AND SALE; ASSIGNMENT
SECTION 2.1 Purchase and Sale of Shares: Assignment. (a) Subject to the
terms and conditions set forth herein, at the Closing (as hereinafter defined),
Seller shall sell, transfer and deliver to Buyer, and Buyer shall purchase,
acquire and accept from Seller the Shares, for an aggregate purchase price of
One Million Five Hundred Thousand United States Dollars ($1,500,000) (the
"Purchase Price" ). Any stock transfer or other tax payable with respect to the
transfer of the Shares hereunder shall be paid by Seller.
(b) Subject to the terms and conditions set forth herein, at the
Closing, Seller shall assign, convey and transfer, and Buyer shall accept from
Seller, for no additional consideration, all of Seller's right, title and
interest in and to the Investment Agreement, the Investor's Rights Agreement,
the Registration Rights Agreement and the Letter Agreement (the "Assignment").
SECTION 2.2 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall be held at the offices of Berkman Wechsler,
6 Wissotzky Street, Tel Aviv, and Benesch, Friedlander, Coplan & Aronoff LLP;
Suite 900, 88 East Broad street, Columbus, OH 43215 ("BFCA") at _______ Tel -
Aviv Time or ______ Eastern Time on December _____, 1999 or at such other time,
date and place as may be otherwise mutually agreed by the parties (the time and
date of the Closing being hereinafter referred to as the "Closing Date"). At the
Closing, at the offices of Berkman - Wechsler Seller shall deliver to Buyer
certificates representing all of the Shares, accompanied by stock transfer power
duly executed for immediate filing with the Israeli Registrar of Companies. As
payment in full for the Shares being purchased under this Agreement and for the
Assignment, and against the delivery of the certificates as aforesaid and the
other instruments set forth in Article V hereof, on the Closing Date, Buyer
shall deliver to Seller at the offices of BFCA by certified or bank check
payable to, or by wire transfer of immediately available funds to the account
designated by Seller, the Purchase Price. All transactions consummated on the
Closing Date shall be deemed to have taken place simultaneously.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that (as used herein the term Company
shall mean the Company and its subsidiaries, taken as a whole):
SECTION 3.01 Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
SECTION 3.02 Title to and Validity of the Shares. Seller owns and holds
good and marketable title to the Shares, free and clear of any Lien of any kind
other than restrictions imposed by the Articles of Association. At the Closing,
Buyer shall acquire the Shares, free and clear of any Lien of any kind.
SECTION 3.03 Authority Relative to this Agreement. Seller has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby (the "Contemplated
Transactions"). The execution and delivery of this Agreement and the
consummation of the Contemplated Transactions have been duly and validly
authorized by Seller, and no other proceedings on the part of Seller (or any
<PAGE> 3
other Person) are necessary to authorize the execution and delivery by the
Seller of this Agreement or the consummation of the Contemplated Transaction.
This Agreement has been duly and validly executed and delivered by Seller and
constitutes the legal, valid and binding agreement of the Seller enforceable
against the Seller in accordance with its terms.
SECTION 3.04 No Conflicts; Consents. The execution and delivery by
Seller of this Agreement and the performance of its obligations hereunder will
not (i) violate any provision of the certificate of incorporation or by-laws of
Seller or, to Seller's knowledge the Articles of Association or the Memorandum
of Association of the Company; (ii) require the Seller or, to Seller's knowledge
, the Company, to amend any Contract or obtain any consent, approval or action
of or waiver from, or make any filling with, or give any notice to, any
Governmental Body or any other Person; (iii) violate, conflict with or result in
the breach of any of the terms of, or otherwise cause the termination of, give
any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, any Contract to
which the Seller or, to Seller's knowledge , the Company, is party or by or to
which the Seller, to seller's knowledge, the Company, or any of their Assets may
be bound or subject, or result in the creation of any Lien upon the Shares
pursuant to the terms of any such Contract; or (iv) violate any law, regulation,
order, writ, judgment, injunction or permit of any Governmental Body against, or
binding upon, such Seller or, to Seller's knowledge the Company; or (v) violate
any right of first refusal or any other right with respect to the purchase of
the Shares created under any agreement to which Seller is a party. Except as
contemplated by this Agreement, no other Person has or, at the Closing will
have, any rights to acquire the Shares as against the Seller.
SECTION 3.05 Financial Information.
(a) Buyer was previously furnished with (i) the audited balance sheet
of the Company as of December 31, 1998, and the related audited statements of
income and cash flow of the Company for the year ended December 31, 1998 (the
"Audited Financial Statements"); and (ii) the unaudited balance sheet of the
Company as of September 30, 1999 (the "Balance Date"), and the related unaudited
statements of income and cash flow of the Company for the quarter ended
September 30, 1999 (the "Unaudited Financial Statements").
(b) To Seller's knowledge, the Audited Financial Statements have been
prepared in accordance with Israeli GAAP consistently applied and fairly present
the financial position of the Company as of December 31, 1998 and the results of
its operations and cash flow for the year ended December 31, 1998. To Seller's
knowledge, the Unaudited Financial Statements have been prepared in accordance
with Israeli GAAP consistently applied and fairly present the financial position
of the Company as of September 30, 1999 and the nine months ended September 30,
1999.
(c) Except as set forth in Schedule 3.05(c), to Seller's knowledge,
since the date of the Balance Date, (i) the Company has not incurred any
liabilities or entered into any transaction which was not in the ordinary course
of its business consistent with past practices; (ii) there has been no material
adverse change in the business, prospects, operations, assets, liabilities or
condition (financial or otherwise) of the Company; (iii) the Company has not
declared or paid any dividend or made any distribution, directly or indirectly,
on their respective shares or any other equitable securities; (iv) the Company
has not made any direct or indirect loans or payments to any shareholder or any
Affiliate thereof; (v) the Company has not increased the compensation of any of
its officers, or the rate of pay of its employees, except as part of regular
compensation increases in the ordinary course of business; (vi) there has been
no resignation or termination of employment of any officers or key employee of
the Company; (vii) there has been no sale, assignment or transfer of any
tangible asset of the Company except in the ordinary course of business
consistent with past practices and no sale, assignment or transfer of any
patent, trademark, trade secret or any other intangible asset of the Company.
SECTION 3.06 Agreement.
(a) Other than this Agreement the Research and License Agreement, the
Sublicense Agreement, the Investment Agreement, the Investor's Rights Agreement,
the Registration Rights Agreement and the Letter Agreement, the Seller is not a
party to any agreements, written or oral, relating to the Shares or otherwise
between Seller and the Company. As of the date hereof, all such Agreements are
in full force and effect and constitute the legal, valid and binding obligation
of the parties thereto, enforceable against such parties in accordance with
their respective terms.
<PAGE> 4
(b) To Seller's knowledge, the Company is not in breach of any material
obligation under any deed, agreement (including the Research and License
Agreement) or transaction to which it is a party and, to Seller's knowledge, no
third party that has transacted business with the Company is in breach of any of
its obligations under any deed, agreement or transaction to which it is a party
with the Company. The Seller has no knowledge of the invalidity or grounds for
rescission, avoidance or repudiation of any agreement or other transaction to
which the Company is a party and to Seller's knowledge, the Company has received
no notice of any intention to terminate any such agreement or repudiate or
disclaim any other transaction.
SECTION 3.07 Litigation. To Seller's knowledge, there is no action,
suit, claim, proceeding or investigation pending or threatened against or
affecting the Company or any of its directors, officers or employees (in their
capacity as such), at law or in equity, or before or by any court, arbitration
board or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. To Seller's knowledge, the Company has not
received any memorandum or legal advice from legal counsel to the effect that it
is exposed from a legal standpoint to any liability or disadvantage which may
result in an adverse effect on the business, prospects, financial condition,
operations, property or affairs of the Company. To Seller's knowledge, there is
no action or suit by the Company pending, threatened or contemplated against
others.
SECTION 3.08 Licenses, Patents, Trademarks.
(a) To Seller's knowledge, the Company owns or possesses adequate
licenses or other rights to use all patents, patent applications, trade names,
copyrights, manufacturing processes, formula, trade secrets, customer lists and
know how (collectively, the "Intellectual Property") necessary or desirable to
enable the operation of the business of the Company as now being conducted and
as proposed to be conducted.
(b) To Seller's knowledge, no Intellectual Property, used or proposed
to be used in the business of the Company as currently conducted or
contemplated, has infringed or will infringe any intellectual property rights of
others and the use of such Intellectual Property in the business of the Company
as currently conducted or contemplated, will not constitute an infringement,
misrepresentation, misappropriation or misuse of any intellectual property
rights of any third party. To Seller's knowledge, no claim is pending or
threatened to the effect that any such Intellectual Property owned or licensed
to the Company, or which the Company otherwise has the right to use, is invalid
or unenforceable by the Company and Seller is not aware of any basis for any
such claim (whether or not pending or threatened). To Seller's knowledge, no
third party has claimed or has reason to claim that any person employed by or
affiliated with the Company has (i) violated or may be violating any of the
terms or conditions of his employment, non-competition or non-disclosure
agreement with such third party, (ii) disclosed or may be disclosing or utilized
or may be utilizing any trade secret or proprietary information or documentation
of such third party or (iii) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees.
SECTION 3.09 Disclosure. To Seller's knowledge, neither this Agreement,
nor any Schedule or Exhibit to this Agreement, contains an untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein not misleading. There is no fact specific to the Company, as
opposed to general business, legal and scientific information, which Seller has
knowledge of and of which Seller is aware, which has or could have a material
adverse effect on the Company's business, prospects, financial condition,
operations, property or affairs of the Company and its subsidiaries but which
seller has not disclosed to Buyer in writing.
For the purpose of this Article the term "To Seller's knowledge" shall
mean: the Seller's knowledge, based upon any written information furnished to
the Seller by the Company, and any information (written or oral) given to any
person who is currently a director, officer, or employee of Seller and/or who
was acting at any time of Seller's behalf as a director and/or observer of the
Company's Board of Directors, but without further investigation including but
not limited to any review of publicly available information or of public records
in any jurisdiction.
<PAGE> 5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
SECTION 4.01 Corporate Existence and Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the laws of
the State of Israel, and has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the Contemplated
Transactions.
SECTION 4.02 Authority Relative to This Agreement. The execution and
delivery of this Agreement and the consummation of the Contemplated Transactions
have been duly and validly authorized and approved by the Board of Directors of
Buyer and no other proceedings on the part of Buyer are necessary to authorize
this Agreement or the Contemplated Transactions to which it is party. This
Agreement has been duly and validly executed and delivered by Buyer and
(assuming the legal, valid execution and delivery of this Agreement by Seller)
constitutes the valid and binding agreement of Buyer, enforceable against Buyer
in accordance with its terms.
SECTION 4.03 No Conflicts; Consents. The execution and delivery of this
Agreement by Buyer and the performance of its obligations thereunder will not
(i) violate any provision of the certificate of incorporation or by-laws of
Buyer; (ii) require Buyer to amend any contract or, obtain any connect, approval
or action of or waiver from, or make any filing with, or give notice to, any
Governmental Body or any other Person, other than consents, approvals, actions
or waivers obtained prior to the date hereof, (iii) violate, conflict with or
result in the breach of any of the terms of, result in a material modification
of the effect of, or otherwise cause the termination of or give any other
contracting party the right to terminate, or constitute a default under, any
Contract to which Buyer is a party or by or to which it or any of its Assets of
Buyer pursuant to the terms of any such Contract; or (iv) violate any law,
regulation, under, writ, judgment, injunction or permit of any Governmental Body
against, or binding upon, Buyer.
ARTICLE V
CONDITIONS TO CLOSING
5.01 The obligation of Buyer to purchase and pay for the Shares being
purchased by it on the Closing Date is, at its option, subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions:
(a) Representations and Warranties. All representations and warranties
of Seller contained herein to Buyer shall be true and correct at the time of the
Closing as though made again at that time.
(b) Performance. Seller shall have performed and complied with all the
agreements, obligations and covenants contained herein required to be performed
or complied with by it prior to or at the Closing Date and the President of the
Seller shall have certified to the Buyer in writing to such effect and to the
further effect that all of the conditions set forth in this Article V have been
satisfied in the form of Exhibit 5.1B attached hereto.
(c) All Proceedings to be Satisfactory. All corporate and other
proceedings to be taken by Seller and the Company in connection with the
Contemplated Transactions hereby and all documents incident thereto shall be
satisfactory in the form and substance to Buyer and its counsel, and Buyer and
its counsel shall have received all such counterparts originals or certified or
other copies of such documents as they reasonably may request.
(d) Opinion of Seller's Counsel. Buyer shall have received from BFCA,
counsel for Seller, an opinion dated the Closing Date in the form attached
hereto as Exhibit 5.1D.
(e) Resolutions. Buyer and their counsel shall have received copies of
all of the resolution adopted by the Board of Directors of Seller authorizing
the execution, delivery and performance of the Contemplated Transaction; and
(ii) Duly adopted by the Board of Directors of the Company authorizing that
Buyer is not a competitor or potential competitor of the Company (in accordance
with Section 13 of the Registration Rights Agreement).
<PAGE> 6
(f) Government Filings and Consents. Seller shall have made all
required filings with, and shall have obtained all consents, approvals or other
actions required by, the Company, any Governmental Body or any other Person or
entity that is necessary or required for the valid execution, delivery and
performance of the transactions contemplated by this Agreement.
(g) Share Certificates. Seller shall have delivered to Buyer share
certificates, representing the Shares being purchased by Buyer, together with
duly executed stock transfer power for immediate filing with the Israeli
Registrar of Companies.
5.02 Conditions to the Obligations of Seller to Close. The obligation
of Seller to transfer and deliver the Shares being purchased by Buyer on the
Closing Date is subject to the payment by Buyer to Seller of the Purchase Price.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 Survival. The warranties, representations and covenants of
Seller contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of Buyer.
SECTION 6.02 Notices. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, telecopied (with a copy sent by mail as
provided herein) or mailed (by registered or certified mail, postage prepaid) as
follows:
if to Buyer: Biomedical Investments (1997) Ltd.
23 Shaul Hamelech Boulevard
Tel-Aviv
Attn: Prof. Benad Goldvasser
Fax: (03) 609-5322
with a copy to:
Berkman Wechsler
6 Wissotzky Street
Tel Aviv
Attn: Ofira Gordon, Esq.
Fax: (03) 604-5775
if to Seller: Neoprobe Corporation
425 metro Place North
Suite 4300
Dublin, Ohio 43017-1367
Attention:
Fax: (614) 793-7522
with a copy to:
Benesch, Friedlander, Coooplan & Aronoff LLP
Suite 900
88 East Broad Street
Columbus, OH 43215
Attention: Robert S. Schwartz
(b) Each such notice or other communication shall be effective (i) if
given by telecopier, when
<PAGE> 7
such telecopy is transmitted number specified in Section 6.02 (a) (with
confirmation of transmission) or (ii) if given by any other means, when
delivered at the address specified in Section 6.02(a). Any party by notice given
in accordance with this Section 6.02 to the other part may designate another
address (or telecopier number) or person for receipt of notice hereunder. Notice
by a party may be given by counsel to such party.
SECTION 6.03 Entire Agreement. This Agreement (including the Exhibits
hereto), contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
SECTION 6.04 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by the parties hereto or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any party of any such right, power or privilege.
SECTION 6.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Israel, without regard to
the conflict of law provisions thereof.
SECTION 6.06 Binding Effect. This Agreement and all of its provisions,
rights and obligations shall be inure to the benefit of the parties hereto and
their respective successors, heirs and legal representatives.
SECTION 6.07 Further Assurances. The parties herein agree to cooperate
with each other in performing the terms and conditions of this Agreement,
including without limitation, executing and delivering such further instruments,
documents, instructions or any assurances as the Company and/or Buyer shall deem
necessary to comply with this Agreement and to otherwise carry out and give full
effect to the provisions of this Agreement and the intentions of the parties as
reflected thereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BIOMEDICAL INVESTMENTS LTD. NEOPROBE CORPORATION.
By: /s/ [illegible] By: /s/ David Bupp
--------------------------- ---------------------------
Name: Name: David Bupp
------------------------- -------------------------
Title: Managing Director Title: President, CEO
------------------------ ------------------------
<PAGE> 9
SCHEDULE I
----------
NAME OF SHARES NUMBER OF SHARES TO BE PURCHASE PRICE
PURCHASED
Common A Share 2 10US$
PREFERRED A SHARES 170,650 1,499,990US%
Total 170,652 1,500,000US$
<PAGE> 1
Omitted portions of this Exhibit are subject to a Request for
Confidential Treatment under Rule 24b-2.
Exhibit 10.4.45
MANUFACTURING AND SUPPLY AGREEMENT
THIS AGREEMENT entered into this 30th day of March, 2000, between
Neoprobe Corporation, 425 Metro Place North, Suite 300, Dublin, Ohio 43017
(hereinafter referred to as ("Neoprobe") and Plexus Corp, 55 Jewelers Park
Drive, P.O. Box 156, Neenah, Wisconsin 54957-0156 (hereinafter referred to as
("Plexus").
WHEREAS, Neoprobe is a biomedical company which, using its proprietary
technology and knowhow, has developed a handheld gamma radiation detection
device used for detection of gamma radiation in radioisotope guided surgery and
intraoperative lymphatic mapping; and
WHEREAS, Plexus is in the business of designing, developing, and
manufacturing electromechanical instruments, medical instruments and electronic
products; and
WHEREAS, Neoprobe desires to have Plexus manufacture and supply the
device to Neoprobe.
NOW, THEREFORE, in consideration of the mutual covenants exchanged
herein the parties agree as follows:
ARTICLE I. DEFINITIONS
1.01 Certificate of Release (or Certificate of Compliance). As used
herein the term "Certificate of Release" is used to mean the document supplied
by Plexus to Neoprobe with each lot or batch of Product stating that all
Product, manufactured by Plexus and comprising that lot, meet or exceed the
"Specifications" for the Product.
1.02 Components. The term "Components" shall mean the individual parts
which are assembled to make a Product, as well as packaging and labeling for
Product.
1.03 Control Unit. The term "Control Unit" shall mean the neo2000,
intraoperative gamma radiation detection device including a microcomputer-based
unit which measures the presence of gamma-emitting isotopes, which unit
translates the gamma pulses received from a Probe (defined in Section 1.12
herein) into understandable displays and sounds.
1.04 Device Master Record. The term "Device Master Record ("DMR") as
used herein shall mean the compilation of records containing the procedures and
specifications for a finished device as described by 21 CFR Section 820.3(j) and
Section 820.18 1.
1.05 Effective Date. The "Effective Date" of this Agreement shall be
the date written herein above.
1.06 FDA and Act. The term "FDA" and the term "Act" as used herein
shall mean the United States Food and Drug Administration or any successor
agency having the administrative authority to regulate the approval for testing
or marketing of human pharmaceutical or biological products and medical devices
in the United States; and the term "Act" as used herein, refers to the Federal
Food, Drug & Cosmetic Act (21 U.S.C. Section 301, et seq.).
1.07 QSR. As used herein the term "QSR" means the current good
manufacturing practice requirements set forth in 21 CFR , Parts 808, 812, and
820 that govern the methods used in, and the facilities, and controls used for,
the design, manufacture, packaging, labeling, installation, and servicing of all
finished devices intended for human use to ensure that the finished device will
be safe and effective and comply with the Act.
1.08 Long Lead Time Component(s). as used herein shall mean all of
those individual parts and materials whose current lead times extend beyond
forty (40) business days. The Long Lead Time Components may,
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 2
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
from time to time, be reviewed by Plexus and Neoprobe, at the request of either
party due to possible changes in market conditions of supply and demand
affecting the procurement by Plexus of the Components and/or Long Lead Time
Components for the assemblies hereunder. Any changes resulting from such review
shall be with the mutual written agreement of Plexus and Neoprobe.
1.09 Monthly Rolling Quantity Forecast of Delivery Requirements. As
used herein shall mean the written documents provided to Plexus by Neoprobe each
month indicating the delivery requirements projected for the next twelve (12)
months.
1.10 NCNR Component(s). As used herein shall mean those parts that are
not cancelable once placed on order with Plexus suppliers, and are not
returnable once delivered to Plexus. The NCNR Component(s) may, from time to
time, be reviewed by Plexus and Neoprobe, at the request of either party due to
possible changes in market conditions of supply and demand affecting the
procurement by Plexus of the Components and/or NCNR Component(s) for the
assemblies hereunder. Any changes resulting from such review shall be with the
mutual written agreement of Plexus and Neoprobe.
1.11 Person. As used herein, the term "Person" shall mean any
individual, corporation, partnership, business trust, business association,
governmental entity, governmental authority or other legal entity.
1.12 Probe. As used herein, the term "Probe" shall mean a handheld
gamma radiation sensing device which connects to the Control Unit.
1.13 Product. The term "Product" as used herein, shall mean the
finished, packaged and labeled Control Unit and or Probe listed on Exhibit 1.13
and "released" in accordance with Section 7.12 herein.
1.14 Quarter. The term "Quarter" as used herein shall mean the
consecutive three (3) month periods beginning January 1, April 1, July 1, and
October 1 of each Year.
1.15 Specifications. As used herein, the term "Specifications" shall
mean the requirements with which the Product must conform as provided by the
device Specifications which are included in the Device Master Record for each
Product.
1.16 Special Component(s) as used herein shall mean those parts that
have special procurement conditions such as limited change parameters or other
special liability conditions that are required by Plexus' suppliers. The Special
Component(s) may, from time to time, be reviewed by Plexus and Neoprobe, at the
request of either party due to possible changes in market conditions of supply
and demand affecting the procurement by Plexus of the Components and/or Special
Component(s) for the assemblies hereunder. Any changes resulting from such
review shall be with the mutual written agreement of Plexus and Neoprobe.
1.17 Year. The term "Year" shall mean the consecutive twelve (12) month
period beginning January 1 of a year and ending December 31 of such year.
ARTICLE II. SUPPLY OF PRODUCT
2.01 Manufacture. Neoprobe hereby appoints Plexus as Neoprobe's
exclusive supplier for all of Neoprobe's requirements for the Products listed on
Exhibit 1.13 and Plexus hereby accepts such appointment.
2.02 Price of Product. The unit price charged by Plexus to Neoprobe for
each unit of Product may be amended from time to time after mutual discussion of
the parties. Unless stated otherwise, prices quoted are F. O. B. Plexus's
manufacturing facility. Unless specifically stated otherwise, all quoted prices
are firm for thirty (30) days from the date of quotation. Quotations are based
on drawings, specifications, and other written information available
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 3
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
to Plexus at the time of quotation. Any additional data supplied at the time of
purchase may necessitate price adjustments.
2.03 Payment of the Purchase Price. Plexus shall bill Neoprobe for all
purchases of Product made under this Agreement by invoice sent to Neoprobe at
Neoprobe's address shown on the first page of this Agreement. Neoprobe shall pay
all invoices net thirty (30) days after: (i) receipt of such invoice, and (ii)
receipt of a Certificate of Release for the Product.
2.04 Payment of Taxes. Any manufacturer's tax, retailer's occupation
tax, use tax, sales tax, excise tax, or tax of any nature whatsoever imposed on
or measured by the transaction between Plexus and Neoprobe shall be paid by
Neoprobe in addition to the invoice price for Product. In the event Plexus is
required to pay such tax, Neoprobe shall reimburse Plexus therefore, within ten
(10) days of written demand by Plexus to Neoprobe for such reimbursement. If the
transaction between Plexus and Neoprobe is exempt from all such taxes, Neoprobe
shall provide Plexus with a tax exemption certification or other document
acceptable to all taxing authorities at the time the order is submitted.
2.05 Addition of Other Assemblies to the Agreement. Additional devices
may be added to this Agreement by mutual consent of the parties. Any additional
devices added to this Agreement shall require individual specifications and a
determination of a "per unit" price as described in Section 2.02 hereinabove.
2.06 Failure to Supply All Requirements. In the event Plexus is unable
to supply substantially all of Neoprobe's requirements for Product, for reasons
solely within Plexus' control, Neoprobe may have the right to source Product
from an alternative contract manufacturer, subject to Neoprobe providing Plexus
with six (6) months prior written notice of its desire to source the Product
from an alternative contract manufacturer and Neoprobe has provided Plexus a
reasonable time period to cure any delays in supplying Neoprobe with the
Product. Neoprobe's right to use a third party manufacturer for all or part of
its requirements for Product shall remain in effect until six (6) months after
Plexus notifies Neoprobe that it is once again able to supply substantially one
hundred percent (100%) of Neoprobe's requirements for Product.
2.07 Competitive Pricing. In the event Neoprobe is able to source
Product from a third party manufacturer at a price which is significantly better
(***) than the price charged by Plexus pursuant to Section 2.02, the "exclusive
supplier" status granted to Plexus pursuant to Section 2.01 shall become
nonexclusive; provided however, that Plexus shall have the right to match the
price offered by the third party in which case Plexus shall remain an exclusive
supplier.
2.08 Plexus Becomes Non-Exclusive Supplier. If Plexus' status as
"exclusive supplier" becomes "non- exclusive" in accordance with this Section
2.07, Neoprobe agrees to purchase all finished Product, raw materials, all
Components in Plexus' inventory (including the full markup as defined in the
Plexus Quotation), and other Components for which Plexus has liability or on
order, but which are not in Plexus' inventory, as well as payment for any and
all in-process manufacturing costs and expenses, including, ramp down costs,
cancellation or restocking charges. To help minimize the impact of cancellation
charges, Plexus will attempt to restock components at the supplier, resell the
components, and/or utilize the components on non-Neoprobe assemblies.
ARTICLE III. FORECAST, ORDERS, MATERIALS AND SCHEDULING
3.01 Forecast. Within fifteen (15) days after the Effective Date,
Neoprobe shall deliver to Plexus a forecast of the quantity of Product required
for the initial twelve (12) month period from the Effective Date (the "Initial
Forecast") and shall thereafter update such forecast on a monthly basis and
provide it to Plexus on or before the fifteenth (15th) day of each month so that
the parties have a twelve (12) month rolling forecast of the estimated
requirements for Product. Neoprobe shall promptly notify Plexus, at any time,
Neoprobe anticipates a material
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 4
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
deviation from the forecast. Plexus shall promptly notify Neoprobe at any time
Plexus anticipates a material deviation in its ability to meet the forecast.
3.02 Manufacturing Lead Time. For each Product to be manufactured,
Plexus establishes a manufacturing lead time, which is the number of business
days it will take, on average, to receive and kit all Components, assemble, test
and ship the lot of finished Product. Unless otherwise noted, this manufacturing
lead- time is twenty (20) business days. Plexus schedules all Components for a
particular lot of Product to arrive one manufacturing lead-time prior to the
Neoprobe due date. Plexus then uses this information, together with the Forecast
and Purchase Order information as defined below, to place commitments to its
suppliers for materials.
3.03 Purchase Orders. Neoprobe will issue Neoprobe Purchase Orders
("POs") at least sixty (60) business days prior to the required delivery dates
for Product in accordance with, but not limited to, the Monthly Rolling Quantity
Forecast of Delivery Requirements. Neoprobe POs for delivery with lead times of
less than sixty (60) business days may be mutually agreed to by Plexus and
Neoprobe.
3.04 Monthly Rolling Quantity Forecast of Delivery Requirements.
Neoprobe shall provide to Plexus a Monthly Rolling Quantity Forecast of Delivery
Requirements in accordance with Section 3.01 above. This Monthly Rolling
Quantity Forecast of Delivery Requirements for each assembly shall be used by
Plexus to determine the Components and/or the Long Lead-Time Components, NCNR
Components and/or Special Components that Plexus must obtain and/or procure
and/or inventory, and unless otherwise agreed to, Plexus will negotiate pricing
contracts with its supplier based upon the forecast. Plexus shall procure in
advance of Neoprobe POs for assemblies, pursuant to the Monthly Rolling Quantity
Forecast of Delivery Requirements for each Product, the Components and/or the
Long Lead Time Components, NCNR Components and/or Special Components, as
required for each Product.
3.05 Schedule Changes. Neoprobe may request a change to the delivery
schedule at any time. Schedule changes can have an extraordinary effect on the
amount of inventory at Plexus, the impact for which is not considered in the
original cost of the Product. Frequent schedule changes may result in additional
administrative charges. If Neoprobe determines that the total annual rolling
quantity forecast of delivery requirements for any Product previously specified
in the Monthly Rolling Quantity Forecast of Delivery Requirements will be
delayed and/or reduced in quantity, then Plexus shall notify Neoprobe that
Plexus has procured and is inventorying and/or has on order with its Components
and/or Long Lead Time Components, NCNR Components and/or Special Components
suppliers an excess quantity of Components and/or Long Lead Time Components,
NCNR Components and/or Special Components that Plexus shall be unable to use for
any other currently forecasted Product requirement specified in the Monthly
Rolling Quantity Forecast of Delivery Requirements. Rescheduling of delivery
requirements less than thirty (30) days prior to the delivery date may only be
done with mutual agreement between Plexus and Neoprobe. Any schedule change may
result in a "Schedule Change Condition" as described in Section 3.06 and Section
3.07 below with corresponding liability to Neoprobe.
3.06 Schedule Decreases. For schedule decreases issued within the
manufacturing lead-time of the scheduled delivery date, Neoprobe will either:
a) Accept shipment of the completed assemblies within the
calendar month originally scheduled: or
b) Pay full price and accept title and risk of los for completed
assemblies and any work in process materials and labor. Plexus
will warehouse completed assemblies for a reasonable period of
time.
For schedule decreases issued outside the manufacturing lead-time of the
scheduled delivery date, the Neoprobe will:
a) Pay for and accept title and risk of loss for the value of the
components (including the full component markup as defined in
the Plexus quotation) which Plexus is unable to return or
reschedule to meet the new schedule requirements; and
b) Pay Plexus for any additional cost from suppliers resulting
from the rescheduling.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 5
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
3.07 Schedule Increases. For schedule increases, Plexus will make its
best effort to obtain the Components necessary to meet Neoprobe requirements.
However, Plexus may be unsuccessful in obtaining all of the Components required
to meet the Neoprobe's increased requirements. In that situation, Plexus
reserves the right to Neoprobe payment of the value of all inventory in house as
of the delivery date that is a result of the increased requirement.
3.08 Engineering Change. The term "Engineering Change(s)" (hereinafter
called "EC" or "EC's") shall mean those mechanical, software, or electrical
design and/or specification and requirement changes which, if made to the
Product to be delivered hereunder, would affect the schedule, performance,
reliability, quality, availability, serviceability, appearance, dimensions,
tolerance, safety or purchase price of such Product or which would require
additional approval testing. Plexus may determine that Engineering Changes will
affect its ability to maintain the delivery schedule of Product , due to the
lead time of newly specified parts and/or the impact of substantial rework or
modification. Under these circumstances, Plexus reserves the right to define a
new schedule for delivery and treat this as a Schedule Change Condition, with
the Neoprobe liability as defined under Section 3.06 or Section 3.07. Upon
receipt of an EC, Plexus shall review Neoprobe's proposed EC and shall give to
Neoprobe a written evaluation of the EC, stating Plexus' cost to implement the
EC (including the cost to modify any tooling), the excess quantity of Components
and/or Long Lead Time Components, NCNR Components and/or Special Components
Plexus has inventoried and/or has on order with its Components and/or Long Lead
Time Components, NCNR Components and/or Special Components suppliers that are
unusable for any other assembly requirement and excess due to the EC, and
associated costs and expenses such Components and/or Long Lead Time Components,
NCNR Components and/or Special Components that Neoprobe shall be liable for and
the cost savings, if any, resulting from the EC, and the expected effect on the
schedule, availability and/or purchase price of such assemblies, or which may
require additional approval tests by Neoprobe.
3.09 Cancellation. Neoprobe may cancel requirements defined in orders
and/or forecasts at any time before the scheduled delivery date. Any Product
requirements canceled within the manufacturing lead-time of the scheduled
delivery date will be invoiced at the full agreed to price for the completed
Product. For Product requirements canceled outside the manufacturing lead time
of the scheduled delivery date, Neoprobe's liability to Plexus will be the value
of the Components in Plexus' inventory (including the full markup as defined in
the Plexus Quotation), and other Components for which Plexus has liability or on
order, but which are not in Plexus' inventory, as well as payment for any and
all in-process manufacturing costs and expenses, including, ramp down costs,
cancellation or restocking charges. To help minimize the impact of cancellation
charges, Plexus will attempt to restock components at the supplier, resell the
components, and/or utilize the components on non-Neoprobe assemblies.
3.10 Changes to Specifications. Neoprobe shall have the right to change
the Specifications for a Product to make reasonable and lawful modifications to
Product Specifications; provided, however, that Plexus shall have a reasonable
period of time to implement such Product Specification changes, and shall be
entitled to full reimbursement by Neoprobe for any costs incurred by Plexus in
implementing such changes, including cost of materials which can not be utilized
as a result such change. Neoprobe shall absorb all reasonable adjustments to
pricing for a Product which may be required as a result of the Specification
change. Neoprobe is responsible for verification and/or validation of any
changes to the Specifications.
3.11 Delivery of Product. Unless otherwise mutually agreed to by the
parties, Plexus shall ship Product to a distribution facility designated by
Neoprobe.
ARTICLE IV. COMPONENTS
4.01 Responsibility for Components. Unless otherwise agreed to by the
parties, Plexus shall be responsible for ordering, purchasing and maintaining
sufficient Components to support manufacture of Product in accordance with the
forecast described in Section 3.01 herein.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 6
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
4.02 Neoprobe Supplied Parts. Neoprobe may provide certain components
required to build Neoprobe's Product in which case, Neoprobe's inability to
provide parts in a timely manner may effect Plexus's ability to meet its
delivery schedule and may cause Plexus to incur extraordinary expenses to hold
Plexus purchased material and/or labor in process. Under these circumstances,
Plexus reserves the right to define a new schedule for delivery based upon
component availability information from Neoprobe and treat this as a Schedule
Change Condition, with Neoprobe liability as defined under Section 3.06 or
Section 3.07 above.
4.03 Minimum Component Purchases. Plexus may have to place orders for
quantities of Components in excess of that required to support Neoprobe
requirements. This may be as a result of minimum order size requirements or
standard package sizes from the supplier. Neoprobe agrees to have the cost of
the excess Components amortized over a maximum of six (6) month's requirements,
or will place a purchase order separately for the excess Components.
ARTICLE V. TOOLING
5.01 Ownership of Tooling. Plexus shall procure and/or produce upon
mutual pre-approvals, all tools, dies, jigs, and fixtures required to
manufacture Product. Plexus shall invoice Neoprobe for all labor and materials
required to procure or produce all such tooling, jigs, fixtures, and the like,
and upon payment Neoprobe shall obtain unrestricted ownership thereof and to the
detailed assembly drawings for such tooling. Neoprobe shall have the right to
access such drawings at all times during the term of this Agreement. All
replacement tools required shall also be owned by Neoprobe upon payment by
Neoprobe of the cost thereof. Termination of this Agreement shall result in the
surrender by Plexus of all tools, drawings for tools, replacement tools,
fixtures and jigs paid for and owned by Neoprobe. The tooling described herein
shall be utilized by Plexus only for the production and/or testing of the
Product. All tooling quoted herein is quoted at the cost to Plexus from its
suppliers. A procurement charge of *** will be added to all tooling with a cost
of less than ***, and a *** procurement charge added to all tooling with a cost
of *** or greater.
5.02 Tooling Maintenance. At all times under this Agreement during
which Plexus has possession of Neoprobe tooling, Plexus shall have the
responsibility of performing normal, expected maintenance and repairs. The cost
of modifying or replacing or rebuilding Neoprobe owned tooling worn through
usage or in need of major repair for reasons other than lack of periodic
maintenance shall be borne by Neoprobe. Plexus shall be responsible for such
costs if such costs are incurred due to a failure to perform proper maintenance
or due to damage due to misuse or negligence of Plexus. Payment for the cost of
any other required tooling changes shall be negotiated by the parties prior to
any change. All modifications and major repairs to tooling must be approved in
advance by Neoprobe. Plexus will obtain a warranty on all tooling purchased by
Plexus for Neoprobe that warrants the tooling against defect during its normal
useful life and that obligates the supplier to replace without cost any
defective tooling. Neoprobe shall have the right to inspect all tooling during
normal business hours. Plexus agrees that it will obtain agreement from any
third parties that will be given possession of Neoprobe owned tooling that such
third parties will permit Neoprobe to inspect tooling during normal business
hours.
5.03 Tooling Removal. Upon expiration or termination of this Agreement,
Neoprobe shall have the night to take possession of and remove from the Plexus
facility, all tooling owned by Neoprobe. The cost of removing and transferring
such tooling shall be borne by Neoprobe. In addition to jigs, fixtures, and
tooling, Neoprobe may take possession of a detailed assembly drawing for such
tooling subject to the conditions stated. Plexus assumes no patent
responsibility and gives no express warranty whatever on tooling and equipment
removed and, other than warranty of title, such tooling is removed "as is."
ARTICLE VI. PLEXUS REPRESENTATIONS, & WARRANTIES
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 7
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
6.01 QSR Compliance. Plexus represents and warrants that, during the
term of this Agreement it shall maintain its manufacturing facility in
accordance with applicable local, state and Federal rules and regulations and
that all Product manufactured pursuant to this Agreement shall be manufactured
in accordance with all applicable local, state, and Federal rules and
regulations and in accordance with applicable QSR requirements.
6.02 Product Within Specifications. Plexus represents and warrants that
all Product shall be manufactured in strict accordance with the Specifications
for such Product and shall be packaged and shipped in accordance with Neoprobe's
approved packaging and shipping specifications.
6.03 Workmanship/Product Warranty. Subject to the limitations set forth
in Section 6.04 below, PLEXUS EXPRESSLY WARRANTS THE WORK AS SET FORTH HEREIN.
PLEXUS MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED (INCLUDING WITHOUT
LIMITATION WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSES).
IN ADDITION, THE FOLLOWING SHALL CONSTITUTE THE EXCLUSIVE REMEDIES FOR NEOPROBE
FOR ANY BREACH BY PLEXUS OF ITS WARRANTIES HEREUNDER. Plexus warrants the
assemblies against all defects in workmanship where the assemblies do not
conform to the agreed upon manufacturing specifications, for a period of one (1)
year from date of shipment, provided agreed upon testing is conducted by Plexus
prior to shipment, except as set forth below. If the material furnished contains
a manufacturer's warranty, Plexus extends, to the extent possible, such
manufacturer's warranty to Neoprobe. Plexus shall repair or replace, at Plexus's
option and free of charge, any portion of the assemblies which is returned to
Plexus's factory securely packaged, insured and with freight pre-paid within the
warranty period, and which upon examination Plexus determines in its sole
discretion to be defective in workmanship. Plexus will return the repaired or
replaced assemblies to Neoprobe with freight pre-paid.
6.04 Limitations on Warranty. The warranty set forth in Section 6.03
herein does not apply to:
a) Any design deficiencies. Plexus expressly disclaims any
warranty responsibility for design deficiency, and for
infringement for the like.
b) Any modifications and/or alterations made to th Product, or
any portion thereof, without the express written authorization
of Plexus obtained in advance. If this is the case, all
warranties made herein are invalid and Neoprobe shall have no
further remedies hereunder against Plexus.
c) Any defect, loss or damage resulting from theft loss, fire,
misuse, abuse, negligence, vandalism, acts of God, accident,
casualty, power failures or surges, alteration, modification
or failure to follow installation, operation or maintenance
instructions, or any other cause beyond Plexus's reasonable
control.
d) Components incorporated into the Product.
IN NO EVENT, REGARDLESS OF CAUSE, SHALL PLEXUS BE LIABLE FOR INCIDENTAL,
INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND, WHETHER IN
CONTRACT OR IN TORT, ARISING FROM ITS PERFORMANCE UNDER THIS AGREEMENT.
6.05 Training of Plexus Personnel. Plexus represents and warrants that
all workmanship performed pursuant to this Agreement shall be performed by
properly trained and authorized Plexus personnel in accordance with Plexus'
quality system and standards.
6.06 Selection of Suppliers. Plexus agrees it shall use reasonable
commercial efforts in selecting third party Component suppliers
ARTICLE VII. REGULATORY
7.01 Compliance with Regulations and Standards. The parties shall
cooperate in providing, as required, information to governmental agencies in
order to obtain and maintain necessary approvals to manufacture and
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 8
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
market Product. Neoprobe shall be responsible for initiating interaction with
regulatory authorities such as the FDA including MDR filing
7.02 Neoprobe Responsibilities. Neoprobe shall be responsible for
ensuring that the Product covered by this Agreement complies with all applicable
laws and regulations, including the Act and implementing regulations. Neoprobe
responsibilities under this Section 7.02, include but are not limited to the
following:
a) Ensuring that governmentally-required marketing
authorizations, including any necessary FDA approvals or
clearances, have been obtained;
b) Responsibility for the content of any label or labeling;
c) Preparation and submission of any required reports to
governmental entities, including but not limited to medical
device reports (MDR's);.
d) Determining whether any recall or other corrective action is
required or appropriate, and developing, implementing and
financing any voluntary or mandatory recall or corrective
action.
e) Reviewing and approving the quality system prior to production
of the Product.
7.03 Test Equipment. Neoprobe will provide Plexus with sufficient
information to calibrate, operate, test and maintain any Neoprobe supplied
equipment.
7.04 Software Validation. Neoprobe shall be responsible for the
software validation of any embedded product software and the validation of all
Neoprobe-supplied test equipment or test software, Neoprobe supplied production
equipment or software, and Neoprobe supplied firmware. Plexus is responsible for
the validation of any Plexus software used in production or as part of the
Quality System. The responsibilities described in this Section 7.04 also apply
to any revisions of any software. Upon the request by Plexus, Neoprobe will
provide Plexus with written certification that the validations in required by
this Section 7.04 have been performed.
7.05 Corrective Actions. Plexus shall be responsible for conducting and
documenting corrective and preventive actions based upon the analysis of the
quality data available to Plexus. Quality data or information known to Neoprobe,
but not provided to Plexus, shall not be included in the analysis of quality
data, and Neoprobe shall be responsible for the analysis of data not provided to
Plexus.
7.06 Component Traceability. Neoprobe shall be responsible for defining
any "critical" components of the Product requiring component level traceability.
Neoprobe must also select the appropriate component level or Product level
traceability grade, in order to meet any applicable FDA requirements or
regulations. Plexus is responsible for implementing the defined
manufacturing-level traceability requirements and for ensuring that the
appropriate manufacturing-level traceability records and associated records are
retained for the duration of the Agreement. Unless otherwise specified in the
Agreement, Plexus is not responsible for ensuring traceability of the Product
covered by this Agreement after distribution to the end user(s).
7.07 Release of Nonconforming Product. Neoprobe may authorize in
writing the release of nonconforming components or Product covered by this
Agreement. Neoprobe must assess whether the use of the nonconforming Product
will affect any regulatory submittals or requirements, and accept responsibility
therefore.
7.08 Product Complaints. Neoprobe shall be responsible for all
complaint handling, including but not limited to maintenance of complaint files,
investigation of complaints, resolution of complaints, trending or otherwise
analyzing complaints, and maintaining complaint-related records. Plexus shall
cooperate with Neoprobe in Neoprobe's investigation of Product complaints.
Neoprobe will promptly provide to Plexus copies of all
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 9
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
complaints received by Neoprobe that refer or relate to Product manufactured by
Plexus and all adverse event reports to a governmental entity that refer or
relate to Product manufactured by Plexus. Any complaints received by Plexus
shall be forwarded to Neoprobe within five (5) working days. Plexus agrees to
provide failure analysis and/or statistical defect analysis of Product covered
by this Agreement, provided Neoprobe returns the product to Plexus' s facility.
Neoprobe shall be responsible for all costs, including but not limited to
freight and insurance, both to Plexus's facility and the return to Neoprobe.
Plexus shall supply Neoprobe with copies of all such failure analyses for
Neoprobe's files. If decontamination is required, Neoprobe and Plexus must
mutually develop the required documentation procedures to be used on the
returned Product.
7.09 Maintenance of Records. Plexus shall be responsible for
maintaining the DHR and DMR for each lot or batch of Product, as well as the
retention of such records in accordance with Neoprobe's record retention SOP
that has been provided to Plexus by Neoprobe. Unless otherwise agreed to by the
parties, records shall be returned to Neoprobe, at Neoprobe's cost, at the end
of the applicable retention period
7.10 Plexus Cooperation In Regulatory Matters. Plexus agrees to
cooperate fully with Neoprobe in connection with Neoprobe's handling of
Neoprobe's obligatory regulatory matters such as adverse event reporting,
complaint disposition, Product tracking, Product recalls and safety alerts.
Plexus agrees to provide routine cooperation at no cost to Neoprobe. Neoprobe
shall be responsible for costs incurred by Plexus as a result of its cooperation
with Neoprobe. In the event of any recall of any Product, caused by Plexus' sole
negligence, and within product warranty as defined, (i) Plexus shall repair or
replace, at Plexus's sole discretion, the recalled Product without charge to
Neoprobe, and (ii) Plexus shall reimburse Neoprobe for its reasonable
out-of-pocket expenses incurred in connection with such recall up to a maximum
of *** in the aggregate (not per occurrence).
7.11 Facility Inspection. Neoprobe shall have the right, during
reasonable business hours, and with reasonable prior notice, to audit all phases
of Product manufacturing activities at Plexus in order to verify compliance with
the Product Specifications and applicable regulatory requirements as they apply
to Neoprobe's product. The cost of conducting such audits shall be borne by
Neoprobe. Plexus agrees to give Neoprobe access during normal working hours to
such records as are reasonably necessary to enable Neoprobe to conduct its
audit, including quality control records, test records, DHRs, DMR, and to permit
Neoprobe to review and copy such records, if applicable. Neoprobe's right of
access to inspect and copy Confidential information of Plexus shall be
restricted to those matters necessary to verify the compliance of Plexus with
the Specifications and regulatory requirements.
7.12 Product Release. Unless otherwise agree to by the parties in
writing, Product shall be "released" according to the following procedure:
a) Plexus shall send by facsimile, a copy of the DHR for a
Control Unit to the "Designated Person" in Neoprobe's
Regulatory Affairs, Quality Assurance group;
b) The Designated Person shall review the DHR and shall sign and
date it, indicate approval or nonapproval and fax the DHR to
Plexus;
c) Upon receipt of an approved DHR, Plexus shall b authorized to
"release" Product for sale; and
d) Plexus shall ship released Product to Neoprobe' designated
Product distribution center.
Notwithstanding the above, if Neoprobe receives an approved DHR, payment of the
product shall not be withheld by Neoprobe unduly and Neoprobe shall pay all
invoices net thirty (30) days after receipt of such invoice and receipt of
Plexus' Certificate of Compliance.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 10
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
7.13 Responsibility for Meeting European Requirements. The parties
shall be responsible for meeting European regulatory requirements as follows:
a) Neoprobe is responsible for making the appropriate
arrangements with its Notified Body before Plexus will apply
the CE mark to the Product.
b) Neoprobe must inform the Notified Body that Plexus will apply
the CE mark, when applicable.
c) Plexus shall be responsible for notifying Neoprobe of any
reports of "incidents" or "near incidents", which allege death
or serious injury to a patient.
d) Neoprobe is responsible for any subsequent reporting to the
Competent Authorities of the EEA (European Economic Area).
e) Neoprobe is responsible for conducting any advisory notices or
recall that are required on medical product manufactured by
Plexus and sold by Neoprobe in the EU area.
f) Plexus is responsible for retaining the appropriate medical
records for the lifetime of the medical device. Since Plexus
does not have access to date describing the lifetime of the
medical device, Plexus will retain the appropriate medical
records as required, or until the Agreement with Neoprobe
ends.
7.14 ISO 9000 Certification. Plexus Electronic Assembly Corporation
(manufacturing) is Certified ISO 9002; Plexus Technology Group Incorporated
(product design/development) is Certified ISO 9001. Plexus agrees that it shall
maintain its ISO certification at all times during the term of this Agreement.
Plexus agrees to immediately notify Neoprobe of any change in its ISO
Certification status. Plexus agrees to provide copies of its ISO certifications
to Neoprobe as they are renewed.
ARTICLE VIII. TERM & TERMINATION
8.01 Term. Unless earlier terminated by the parties pursuant to this
Article VIII, the term of this Agreement shall be from the Effective Date until
December 31, 2003; provided however, that the term of this Agreement may be
extended for additional one (1) year periods by mutual written agreement of the
parties given no later than six (6) months prior to the termination date.
8.02 Early Termination by Neoprobe. Beginning January 1, 2001, Neoprobe
may terminate this Agreement for any reason upon six (6) months prior written
notice to Plexus. During the notice period, Plexus shall use reasonable
commercial efforts to control costs during the notice period and to minimize any
cost liability accruing to Neoprobe pursuant to Section 8.06.
8.03 Termination for Material Breach. Either party may terminate this
Agreement in the event of a material breach by the other, provided that the
party asserting such breach first serves written notice of the alleged breach on
the offending party and such alleged breach is not cured within thirty (30) days
of said notice.
8.04 Termination for Insolvency. In the event that either party shall
become insolvent or shall suspend its business, or shall file a voluntary
petition or any answer admitting the jurisdiction of the court and the material
allegations of, or shall consent to, an involuntary petition pursuant to or
purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or shall make an assignment for the benefit of creditors, or shall
apply for or consent to the appointment of a receiver or trustee of all or a
substantial part of its property (such party, upon the occurrence of any such
event, a "Bankrupt Party"), then to the extent permitted by law the other party
hereto may thereafter immediately terminate this Agreement by giving notice of
termination to the Bankrupt Party.
8.05 Termination for Failure to Supply. Notwithstanding the provisions
of Section 13.01, in the event Plexus is unable to supply Product to Neoprobe
for a *** period due to a delay caused by Plexus, Neoprobe shall have the right
to terminate this Agreement upon *** prior to notice to Plexus. If Plexus is
able to resume supply of substantially all of Neoprobe's requirements during
such *** period, this Agreement shall remain in full force and effect.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 11
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
8.06 Early Termination Liability. In the event of an early termination
of this Agreement by Neoprobe pursuant to Section 8.02 or by Plexus pursuant to
Section 8.03 or Section 8.04, Neoprobe shall be responsible for payment for all
Product scheduled for delivery, for the cost of all materials in inventory or on
order as reflected by open Purchase Orders, for component price adjustments
caused by Neoprobe purchase order cancellations, and for noncancelable and non
returnable materials. Plexus shall use all reasonable efforts to minimize any
and all purchase order cancellation charges, billbacks, and/or restocking
charges.
8.07 Rights or Obligations Upon Termination. Termination of this
Agreement, for whatever reason, shall not affect any rights or obligations which
may have accrued to either party prior to the effective date of termination.
8.08 Confidentiality Upon Termination. The obligations of
confidentiality in Article X and of Indemnification as provided in Article XI
shall survive the expiration or termination of this Agreement.
ARTICLE IX. INTELLECTUAL PROPERTY
9.01 Right to Use Plexus' Proprietary Information. Plexus hereby grants
to Neoprobe and Neoprobe hereby accepts an irrevocable royalty-free nonexclusive
right to use all Confidential Information of Plexus to the extent the use of
such Confidential Information is needed to assemble Product in accordance with
the Specifications. In the event of termination of this Agreement by Neoprobe
pursuant to Section 8.02 or by either party pursuant to Section 8.04, Neoprobe
shall, with prior written approval of Plexus, such consent not to be
unreasonably withheld have the right to grant a sublicense to a third party to
use such Confidential Information to the extent necessary to enable a third
party to manufacture Product on behalf of Neoprobe
9.02 Intellectual Property Rights. All patents, copyrights, trademarks,
or other rights pertaining to inventions, developments, or improvements made in
the course of the work performed by Plexus hereunder are the property of
Neoprobe. Plexus will, upon written direction from Neoprobe, execute any and all
papers and documents prepared or submitted by Neoprobe as may be reasonably
required to transfer or secure to Neoprobe full title and authority over such
rights. Plexus will be compensated by Neoprobe for time and expense as incurred
in this obligation at the then current billing rates for those of its employees
necessary for these purposes.
9.03 Rights to Neoprobe's Intellectual Property. No rights are granted
hereunder to Plexus under any patents, trademarks or copyrights owned or
controlled by Neoprobe except as are incidental only to the manufacture of
Product by Plexus for Neoprobe.
9.04 Indemnity for Infringement. Neoprobe shall assume all
responsibility for determining whether the Product to be manufactured by Plexus
infringes on any patent, copyright or trademark held by a third party, and
Neoprobe shall indemnify and hold harmless Plexus from any liability, including
legal costs and expenses, damages and attorney fees arising from any claim
demand or suit, made by a third party based on allegations or claims that the
Product or any design, patent, copyright, or trademark used in connection with
the Product constitutes an infringement of any patent, trademark or copyright of
the United States or any foreign county held by such third party. In the event
any such claim or suit is asserted or instituted against Plexus, Plexus shall
promptly notify Neoprobe of the assertion of any such allegation or claim.
Neoprobe shall thereupon assume responsibility for and conduct the defense of
each assertion or suit at its expense, and reasonable information and assistance
for the defense of same shall be provided by Plexus for which Plexus will be
compensated for time and expenses at its current billing rate. Plexus shall have
the right, at its expense, to be represented in the defense of any such
assertion or suit by counsel of its own selection.
ARTICLE X. CONFIDENTIALITY
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 12
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
10.01 Confidential Information. Each party ("Receiving Party") shall
maintain in confidence all information heretofore or hereafter disclosed by the
other ("Disclosing Party") which such party knows or has reason to know are
trade secret and other proprietary information owned by or licensed to the
other, including, but not limited to, information relating to the Product and
licenses, patents, patent applications, technology or processes and business
plans of the other party, including, without limitation, information designated
as confidential in writing from one party to the other (all of the foregoing
hereinafter referred to as "Confidential Information"), and shall not use such
Confidential Information except as permitted by this Agreement or disclose the
same to anyone other than those of its officers, directors or employees as are
necessary in connection with such party's activities as contemplated by this
Agreement. Each party shall use its best efforts to ensure that its officers,
directors and employees do not disclose or make any unauthorized use of such
Confidential Information. Each party shall notify the other promptly upon
discovery of any unauthorized use or disclosure of the other's Confidential
Information.
10.02 Limitations on Confidentiality. The obligation of confidentiality
contained in this Article X shall not apply to the extent that: i) the Receiving
Party is required to disclose information by applicable law, regulation or order
of a governmental agency or a court of competent jurisdiction; ii) the Receiving
Party can demonstrate that the disclosed information was at the time of
disclosure already in the public domain other than as a result of actions or
failure to act of the Receiving Party, its officers, directors or employees, in
violation hereof, iii) the disclosed information was rightfully known by the
Receiving Party (as shown by its written records) prior to the date of
disclosure to the Receiving Party in connection with this Agreement; or iv) the
disclosed information was received by the Receiving Party on an unrestricted
basis from a source which is not under a duty of confidentiality to the other
party.
10.03 Disclosure Required by Law. In the event that the Receiving Party
shall be required to make disclosure pursuant to the provisions of Section 10.02
(i) as a result of the issuance of a court order or other government process,
the Receiving Party shall promptly, but in no event more than forty-eight (48)
hours after learning of such court order or other government process, notify, by
personal delivery or facsimile, all pursuant to Section 12.04 hereof, the
Disclosing Party and, at the Disclosing Party's expense, the Receiving Party
shall: i) take all reasonably necessary steps requested by the Disclosing Party
to defend against the enforcement of such court order or other government
process; and ii) permit the Disclosing Party to intervene and participate with
counsel of its choice in any proceeding relating to the enforcement thereof.
10.04 Equitable Remedies for Breach of Confidentiality. The parties
acknowledge that their failure to comply with the provisions of Section 10.0 1
of this Article X may cause irreparable harm and damage to the name and
reputation of the other party for which no adequate remedy may be available at
law. Accordingly, the parties agree that upon a breach by a party of such
provisions, the nonbreaching party may, at its option, enforce the obligations
of the breaching party under those provisions by seeking equitable remedies in a
court of competent jurisdiction.
ARTICLE XI. INDEMNIFICATION
11.01 Plexus Indemnity. Plexus agrees to indemnify, protect and defend
Neoprobe and hold Neoprobe harmless from and against any claims, damages,
liability, harm, loss, costs, penalties, lawsuits, threats of lawsuit, or other
governmental action, including reasonable attorneys' fees, brought or claimed by
any third party which: (i) arise solely as the result of Plexus' solely
negligent or intentional breach of this Agreement or of warranty or
representation made to Neoprobe under this Agreement; or, (ii) which result from
any claim made against Neoprobe as a result of Plexus' solely negligent or
intentional supply of defective Product to Neoprobe and as a result of Plexus'
manufacturing processes only; provided however, that Plexus will not be liable
for errors, or expenses which may be incurred in its performance of the work
under this Agreement which results from the engineering and/or design of the
Product, or from Plexus' reliance upon information, technological records,
sketches, drawings, or prototypes furnished by Neoprobe or Neoprobe's design
engineering firm.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 13
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
11.02 Neoprobe Indemnity. Neoprobe agrees to indemnify, protect, and
defend Plexus and hold Plexus harmless from and against any claims, damages,
liabilities, harm, loss, costs, penalties, lawsuits, threats of lawsuit, recalls
or other governmental action, including reasonable attorneys' fees, brought or
claimed by any third party, which: (i) arise out of Neoprobe's negligent or
intentional breach of this Agreement or of any warranty or representation to
Plexus under this Agreement; or, (ii) result from the negligent acts or willful
malfeasance on the part of Neoprobe or its employees or agents, in connection
with Neoprobe's sale, marketing or distribution of Product or other activities
or actions in connection with the Product.
11.03 Notice of Defense of Actions. Each party shall give the other
prompt notice of any potential liability, and promptly after receipt by a party
claiming indemnification under this Article XI of notice of the commencement of
any action, such indemnified party shall notify the indemnifying party of the
commencement of the action and generally summarize such action. The indemnifying
party shall have the right to participate in and to assume the defense of such
action with counsel of its choosing. An indemnified party shall not have the
right to direct the defense in such an action of an indemnified party if counsel
to such indemnified party has reasonably concluded that there may be defenses
available to it that are different from or additional to those available to the
indemnifying party; provided, however, that in such event, the indemnifying
party shall bear the fees and expenses of separate counsel reasonably
satisfactory to the indemnifying party. The failure to notify an indemnifying
party promptly of the commencement of any such action, if prejudicial to the
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Article XI. No settlement of any
claim or action may be made without the consent of the indemnifying party, which
consent shall not be unreasonably withheld or delayed.
ARTICLE XII. GENERAL WARRANTY
12.01 General Warranty. Each Party hereby represents and warrants that:
a) it has full power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated
herein;
b) this Agreement and the provisions hereof constitute the valid
and legally binding obligations of each party and do not
require the consent, approval or authorization of any Person,
public or governmental authority or other entity;
c) he execution and delivery of this Agreement by each party, and
the performance of a Party's obligations hereunder, are not in
violation of breach of, and will not conflict with or
constitute a default under, the Articles of Incorporation or
Bylaws of either Party, or any material agreement, contract,
commitment or obligation to which either Neoprobe or Plexus is
a party or by which either of it is bound; and
d) will not conflict with or violate any applicable law, rule,
regulation, judgment, order or decree of any governmental.
agency or court having jurisdiction over either party or its
assets or properties.
ARTICLE XIII. MISCELLANEOUS
13.01 Force Majeure. Neither of the parties to this Agreement shall be
liable to the other party for any loss, injury, delay, damage or other casualty
suffered or incurred by such other party due to strikes, lockouts, accidents,
fire, embargoes, explosions, floods, war, governmental action or any other cause
similar thereto which is beyond the reasonable control of such other party and
any failure or delay by a party in the performance of any of its obligations
under this Agreement shall not be considered as a breach of this Agreement due
to, but only so long as there exists, one or more of the foregoing causes;
provided, however, that if Plexus cannot complete an order within ninety (90)
days due to any such cause, Neoprobe may cancel the order without liability to
Plexus, except for product assemblies, parts or components already in inventory,
but not yet shipped, non-cancelable and non- returnable components and work
already in progress.
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 14
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
13.02 Relationship. This Agreement shall not be construed to create
between the parties hereto or their respective successors or permitted assignees
the relationship of principal and agent, joint-venturers, copartners or any
other similar relationship, the existence of which is hereby expressly denied by
each party. Neither party shall be liable to any third party in any way for
engagement, obligation, contract, representation or transaction or for any
negligent act or omission to act of the other except as expressly provided.
13.03 Governing Law. The parties hereby agree that this Agreement shall
be governed by and will be construed in accordance with the laws of the State of
Wisconsin, irrespective of the conflicts of laws provisions thereof. The parties
hereby irrevocably submit to the jurisdiction of the courts of the State of
Wisconsin in any action or proceeding arising out of or relating to this
Agreement, and the parties hereby irrevocably agree that all claims in respect
of such action or proceeding may be determined by such courts. The parties
hereby waive, to the fullest extent possible, the defense of an inconvenient
forum to the maintenance of such action or proceeding, and the parties agree
that a final judgement in any action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgement or in any other
matter provided by law.
13.04 Arbitration. Unless otherwise agreed to in writing by the
parties, any controversy or claim arising out of or relating to this Agreement,
or the parties' decision to enter into this Agreement, or the breach thereof,
shall be settled by arbitration through the American Arbitration Association and
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration proceeding shall be conducted and presided over by
a single neutral arbitrator chosen pursuant to American Arbitration Association
procedures. Decision of the arbitrator shall be final, binding, and not subject
to appeal or review; provided that, either party may request that the arbitrator
review and reconsider his or her decision, in whole or in part. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Neenah, Wisconsin and the
arbitrator shall apply the substantive law of Wisconsin except that the
interpretation and enforcement of this arbitration provision shall be governed
by the federal Arbitration Act. The arbitrator shall not award either party
punitive damages and the parties shall be deemed to have waived any right to
such damages.
13.05 Notice. All notices, proposals, submissions, offers, approvals,
agreements, elections, consents, acceptances, waivers, reports, plans, requests,
instructions and other communications required or permitted to be made or given
hereunder (all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing, and shall be deemed to have been duly
made or given when: i) delivered personally with receipt acknowledged; or ii)
sent by registered or certified mail or equivalent, return receipt requested; or
iii) sent by facsimile or telex; or iv) sent by recognized overnight courier for
delivery within twenty-four (24) hours, in each case addressed or sent to the
parties at the following addresses and facsimile numbers or to such other or
additional address or facsimile as any party shall hereafter specify by
Communication to the other party:
To Neoprobe: David C. Bupp
President & CEO
Neoprobe Corporation
425 Metro Place North, Suite 300
Dublin, Ohio 43017
Fax No. (614) 7937520
With a Copy to: Carl M. Bosch
Vice President, Instrument Development
Neoprobe Corporation
425 Metro Place North, Suite 300
Dublin, Ohio 43017
Fax No. (614) 7937520
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 15
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
To Plexus: Strategic Customer Manager
Plexus Corp.
55 Jewelers Park Drive
P.O. Box 156
Neenah, Wisconsin 549570156
Fax No.: (920) 7206700
With a Copy to: Joseph D. Kaufman
Vice President
Law and Administration
Plexus Corp.
55 Jewelers Park Drive
P. O. Box 156
Neenah, WI 54957-0156
Fax No. (920)751-3234
Notice of change of address shall be deemed given when actually received, all
other Communications shall be deemed to have been given, received and dated on
the earlier of: when actually received, or on the date when delivered
personally; ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or overnight courier; or iii) four
(4) business days after mailing.
13.06 Legal Construction. In case any one or more of the provisions
contained in this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute for such invalid and unenforceable provision in light of the tenor of
this Agreement, and, upon so agreeing, shall incorporate such substitute
provision in this Agreement.
13.07 Entire Agreement, Modifications, Consents, Waivers. This
Agreement together with the Exhibits hereto contains the entire agreement of the
parties with respect to the subject matter hereof. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Each party hereto may, by an instrument in writing, waive compliance by
the other party hereto with any term or provision of this Agreement on the part
of such other party to be performed or complied with. The waiver by either party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.
13.08 Section Headings; Construction. The section headings and titles
contained herein are each for reference only and shall not be deemed to affect
the meaning or interpretation of this Agreement. The words "hereby", "herein",
"hereinabove". "hereinafter", "hereof' and "hereunder", when used anywhere in
this Agreement, refer to this Agreement as a whole and not merely to a
subdivision in which such words appear, unless the context otherwise requires.
The singular shall include the plural, the conjunctive shall include the
disjunctive and the masculine gender shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.
13.09 Execution Counterparts. This Agreement may be executed in any
number of counterparts and each such duplicate counterpart shall constitute an
original, any one of which may be introduced in evidence or used for any other
purpose without the production of its duplicate counterpart. Moreover,
notwithstanding that any of the parties did not execute the same counterpart,
each counterpart shall be deemed for all purposes to be an original, and all
such counterparts shall constitute one and the same instrument, binding on all
of the parties hereto.
ARTICLE XIV. BINDING EFFECT, ASSIGNMENT
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information , has been replaced by "***" in this Exhibit.
<PAGE> 16
Omitted portions of this Exhibit are subject to a Request for Confidential
Treatment under Rule 24b-2.
In entering into this Agreement, each party hereto has relied upon the
expertise and capabilities of the other. Accordingly, neither party may directly
or indirectly assign, delegate, encumber or in any other manner transfer any of
its rights, remedies, obligations, liabilities or interests in or arising under
this Agreement, without the prior consent of the other, which consent shall not
be unreasonably withheld or delayed. Any attempted assignment, delegation,
encumbrance or other transfer in violation of this Agreement shall be void and
of no effect, and shall be a material breach hereof.
IN WITNESS WHEREOF, the parties have cause this Agreement to be
executed as of the day and year first written above.
PLEXUS CORP. NEOPROBE CORPORATION
By: /s/ Chuck Williams By: /s/ David C. Bupp
------------------ -----------------
Name: Chuck Williams Name: David C. Bupp
--------------------- -------------
Title: Vice President Title: President, C.E.O.
-------------------- -----------------
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
<PAGE> 17
Omitted portions of this Exhibit are subject to a Request for
Confidential Treatment under Rule 24b-2.
EXHIBIT 1.13
PRODUCTS
--------
Plexus Part # Description Neoprobe Model #
- ------------- ----------- ----------------
*** *** ***
*** *** ***
Text which has been omitted and filed separately under Rule 24b-2, pursuant to
which Neoprobe Corporation has requested confidential treatment of this
information, has been replaced by "***" in this Exhibit.
<PAGE> 1
Exhibit 11.1
<TABLE>
NEOPROBE CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET LOSS PER SHARE
<CAPTION>
Three Months Ended March 31,
2000 1999
----------- -----------
<S> <C> <C>
Loss attributable to common stockholders $ (791,530) $(3,119,272)
Weighted average number of
shares outstanding:
Weighted average common shares
outstanding beginning of period 23,046,644 22,887,910
Weighted average common shares
issued during period 2,348,083 60,444
----------- -----------
Weighted average number of shares outstanding
used in computing basic net loss per share 25,394,727 22,948,354
=========== ===========
Weighted average number of shares outstanding
used in computing diluted net loss per share 25,394,727 22,948,354
=========== ===========
Loss per share attributable to common stockholders:
Basic $ (0.03) $ (0.14)
=========== ===========
Diluted $ (0.03) $ (0.14)
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,714,969
<SECURITIES> 0
<RECEIVABLES> 1,309,895
<ALLOWANCES> 77,684
<INVENTORY> 488,664
<CURRENT-ASSETS> 4,981,894
<PP&E> 2,175,022
<DEPRECIATION> 1,336,355
<TOTAL-ASSETS> 6,595,642
<CURRENT-LIABILITIES> 2,626,748
<BONDS> 55,332
0
0
<COMMON> 26,071
<OTHER-SE> 1,087,491
<TOTAL-LIABILITY-AND-EQUITY> 6,595,642
<SALES> 1,605,811
<TOTAL-REVENUES> 1,855,811
<CGS> 837,614
<TOTAL-COSTS> 837,614
<OTHER-EXPENSES> 294,045
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,056
<INCOME-PRETAX> (26,862)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,862)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,862)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
