[FORM
OF REPLACEMENT WARRANT]
December
13, 2004
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
| |
|
Warrant
to Purchase
Shares
(subject to adjustment)
of
Common Stock
|
NEOPROBE
CORPORATION
COMMON
STOCK PURCHASE WARRANT
Void
after December 13, 2009
Neoprobe
Corporation (the “Company” ), a Delaware corporation, hereby certifies that for
value received, [_________________]
(“___________”), a _______________________________, or its successors or assigns
(the “Holder”), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, an aggregate of [__________]
fully
paid and nonassessable shares of Common Stock (as hereinafter defined) of the
Company, at an exercise price of $0.46 per share, subject to adjustment as
provided herein (the “Purchase Price”), at any time or from time to time
beginning on the date hereof and prior to 5:00 P.M., New York City time, on
December 13, 2009 (the “Expiration Date”).
This
Warrant is issued pursuant to the Securities Purchase Agreement, dated as of
the
date hereof, as amended by Amendment (the “Amendment”)
dated
as of November 30, 2006 (as so amended by the Amendment, the “Purchase
Agreement”),
among
Neoprobe Corporation, Biomedical Value Fund, L.P., Biomedical Offshore Value
Fund, Ltd. and David C. Bupp, and is subject to the terms thereof. Capitalized
terms used herein and not otherwise defined shall have the respective meanings
assigned to such terms in the Purchase Agreement. The Holder is entitled to
the
rights and subject to the obligations contained in the Purchase Agreement
relating to this Warrant and the shares of Common Stock issuable upon exercise
of this Warrant.
1. Definitions.
For the
purposes of this Warrant, the following terms shall have the meanings
indicated:
“Business
Day”
shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks in the City of New York are authorized or required by law or executive
order to close.
“Closing
Price”
shall
mean, with respect to each share of Common Stock for any day, (a) the last
reported 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 on the principal national securities exchange on which the Common
Stock is listed or admitted for trading or (b) if the Common Stock is not listed
or admitted for trading on any national securities exchange, the last reported
sale price or, in case no such sale takes place on such day, the average of
the
highest reported bid and the lowest reported asked quotation for the Common
Stock, in either case as reported on the Nasdaq or a similar service if Nasdaq
is no longer reporting such information.
“Co-Investor
Warrants”
shall
mean all warrants, other than the Warrant, to purchase Common Stock issued
pursuant to the Purchase Agreement and any subsequent warrants issued pursuant
to the terms of such warrants.
“Common
Stock”
means
the common stock, par value $.001 per share, of the Company, and any class
of
stock resulting from successive changes or reclassification of such Common
Stock.
“Company”
has
the
meaning ascribed to such term in the first paragraph of this
Warrant.
“Current
Market Price”
shall
be determined in accordance with Subsection 3(d).
“Exercise
Date”
has
the
meaning ascribed to such term in Subsection 2(d).
“Expiration
Date”
has
the
meaning ascribed to such term in the first paragraph of this
Warrant.
“Holder”
has
the
meaning ascribed to such term in the first paragraph and Section 9 of this
Warrant.
“Issuable
Warrant Shares”
means
the shares of Common Stock issuable at any time upon exercise of the
Warrant.
“Issued
Warrant Shares”
means
any shares of Common Stock issued upon exercise of the Warrant.
“Nasdaq”
shall
mean the Automated Quotation System of the National Association of Securities
Dealers, Inc.
“Person”
shall
mean any individual, firm, corporation, limited liability company, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind, and shall include any successor (by merger or otherwise)
of
such entity.
“Purchase
Agreement”
has
the
meaning ascribed to such term in the second paragraph of this
Warrant.
“Purchase
Price”
has
the
meaning ascribed to such term in the first paragraph of this
Warrant.
“Warrant”
shall
mean this Warrant and any subsequent Warrant issued pursuant to the terms of
this Warrant.
“Warrant
Register”
has
the
meaning ascribed to such term in Subsection 9(c).
2. Exercise
of Warrant.
(a) Exercise.
This
Warrant may be exercised, in whole or in part, at any time or from time to
time
during the period beginning on the date hereof and ending on the Expiration
Date, by surrendering to the Company at its principal office this Warrant,
with
the form of Election to Purchase Shares (the “Election to Purchase Shares”)
attached hereto as Exhibit A duly executed by the Holder and accompanied by
payment of the Purchase Price for the number of shares of Common Stock specified
in such form.
(b) Delivery
of Shares; Payment of Purchase Price.
As soon
as practicable after surrender of this Warrant and receipt of payment, the
Company shall promptly issue and deliver to the Holder a certificate or
certificates for the number of shares of Common Stock set forth in the Election
to Purchase Shares, in such name or names as may be designated by such Holder,
along with a check for the amount of cash to be paid in lieu of issuance of
fractional shares, if any. Payment of the Purchase Price may be made as follows
(or by any combination of the following): (i) in United States currency by
cash
or delivery of a certified check, bank draft or postal or express money order
payable to the order of the Company, (ii) by assigning to the Company all or
any
part of the unpaid principal amount of the Note held by the Holder in a
principal amount equal to the Purchase Price, (iii) by surrender of a number
of
shares of Common Stock -held by the Holder equal to the quotient obtained by
dividing (A) the aggregate Purchase Price payable with respect to the portion
of
this Warrant then being exercised by (B) the Current Market Price per share
of
Common Stock on the Exercise Date, or (iv) by cancellation of any portion of
this Warrant with respect to the number of shares of Common Stock equal to
the
quotient obtained by dividing (A) the aggregate Purchase Price payable with
respect to the portion of this Warrant then being exercised by (B) the
difference between (1) Current Market Price per share of Common Stock on the
Exercise Date, and (2) the Purchase Price per share of Common Stock.
(c) Partial
Exercise.
If this
Warrant is exercised for less than all of the shares of Common Stock purchasable
under this Warrant, the Company shall cancel this Warrant upon surrender hereof
and shall execute and deliver to the Holder a new Warrant of like tenor for
the
balance of the shares of Common Stock purchasable hereunder.
(d) When
Exercise Effective.
The
exercise of this Warrant shall be deemed to have been effective immediately
prior to the close of business on the Business Day on which this Warrant is
surrendered to and the Purchase Price is received by the Company as provided
in
this Section 2 (the “Exercise Date”) and the Person in whose name any
certificate for shares of Common Stock shall be issuable upon such exercise,
as
provided in Subsection 2(b), shall be deemed to be the record holder of such
shares of Common Stock for all purposes on the Exercise Date.
(e) Issued
Warrant Shares Fully Paid, Nonassessable.
The
Company shall take all actions necessary to ensure that following exercise
of
this Warrant in accordance with the provisions of this Section 2, the Issued
Warrant Shares issued hereunder shall, without further action by the Holder,
be
fully paid and nonassessable.
(f) Continued
Validity.
A
Holder of shares of Common Stock issued upon the exercise of this Warrant,
in
whole or in part, shall continue to be entitled to all of the rights and subject
to all of the obligations set forth in Section 9.
3. Adjustment
of Purchase Price and Number of Shares. The
Purchase Price and the number of shares of Common Stock issuable upon exercise
of this Warrant shall be adjusted from time to time in the following manner
upon
the occurrence of the following events:
(a) Dividend,
Subdivision, Combination or Reclassification of Common Stock.
If the
Company shall, at any time or from time to time, (i) declare a dividend on
the
Common Stock payable in shares of its capital stock (including Common Stock),
(ii) subdivide the outstanding Common Stock into a larger number of shares
of
Common Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares of its Common Stock, or (iv) issue any shares of its capital stock
in
a reclassification of the Common Stock (including any such reclassification
in
connection with a consolidation or merger in which the Company is the continuing
corporation), then
in each
such case, the Purchase Price in effect at the time of the record date for
such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable
on
such date shall be proportionately adjusted so that the Holder of any Warrant
exercised after such date shall be entitled to receive, upon payment of the
same
aggregate amount as would have been payable before such date, the aggregate
number and kind of shares of capital stock which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned upon
such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of
such
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. If a dividend is
declared and such dividend is not paid, the Purchase Price shall again be
adjusted to be the Purchase Price, in effect immediately prior to such record
date (giving effect to all adjustments that otherwise would be required to
be
made pursuant to this Section 3 from and after such record date).
(b) Certain
Distributions.
If the
Company shall, at any time or from time to time, fix a record date for the
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, assets or other property
(other than regularly scheduled cash dividends or cash distributions payable
out
of consolidated earnings or earned surplus or dividends payable in capital
stock
for which adjustment is made under Subsection 3(a)) or subscription rights,
options or warrants, then
the
Purchase Price shall be reduced to the price determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction
(which shall in no event be less than zero), the numerator of which shall be
the
Current Market Price per share of Common Stock on such record date (or, if
an
ex-dividend date has been established for such record date, on the next day
preceding such ex-dividend date), less the fair market value (as determined
in
good faith by the Board of Directors of the Company) of the portion of the
assets, evidences of indebtedness, other property, subscription rights or
warrants so to be distributed applicable to one share of Common Stock and the
denominator of which shall be such Current Market Price per share of Common
Stock. Any such adjustment shall become effective immediately after the record
date for such distribution. Such adjustments shall be made successively whenever
such a record date is fixed. In the event that such distribution is not so
made,
the Purchase Price shall be adjusted to the Purchase Price in effect immediately
prior to such record date (giving effect to all adjustments that otherwise
would
be required to be made pursuant to this Section 3 from and after such record
date).
(c) Issuance
of Common Stock Below Purchase Price.
(i) If
the
Company shall, at any time and from time to time, after the date hereof,
directly or indirectly, sell or issue shares of Common Stock (regardless of
whether originally issued or from the Company’s treasury), or rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock) at a price per share of Common
Stock (determined, in the case of rights, options, warrants or convertible
or
exchangeable securities (collectively, “Securities”), by dividing (x) the total
consideration received or receivable by the Company in consideration of the
sale
or issuance of such Securities, plus the total consideration payable to the
Company upon exercise or conversion or exchange thereof, by (y) the total number
of shares of Common Stock covered by such Securities) which is lower than the
Purchase Price in effect immediately prior to such sale or issuance,
then,
subject
to clause 3(d)(ii), the Purchase Price shall be reduced to a price determined
by
multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(in
the case of Securities, determined as provided below) for such sale or issuance
would purchase at the Purchase Price in effect immediately prior to such sale
or
issuance and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever such sale or issuance is made.
For the purposes of such adjustments, the shares of Common Stock which the
holder of any such Securities shall be entitled to subscribe for or purchase
shall be deemed to be issued and outstanding as of the date of such sale or
issuance of such Securities and the consideration “received” by the Company
therefor shall be deemed to be the consideration actually received or receivable
by the Company (plus any underwriting discounts or commissions in connection
therewith) for such Securities, plus the consideration stated in such Securities
to be payable to the Company for the shares of Common Stock covered thereby.
If
the Company shall sell or issue shares of Common Stock for a consideration
consisting, in whole or in part, of property other than cash or its equivalent,
then in determining the “price per share of Common Stock” and the
“consideration” received or receivable by or payable to the Company for purposes
of the first sentence and the immediately preceding sentence of this Subsection
3(c)(i), the fair value of such property shall be determined in good faith
by
the Board of Directors of the Company. Except as provided below, the
determination of whether any adjustment is required under this Subsection
3(c)(i) by reason of the sale or issuance of Securities and the amount of such
adjustment, if any, shall be made only at the time of such issuance or sale
and
not at the subsequent time of issuance of shares of Common Stock upon the
exercise, conversion or exchange of such Securities.
(ii) No
adjustment shall be made to the Purchase Price pursuant to clause 3(c)(i) in
connection with the (A) issuance of shares in any of the transactions described
in Subsections 3(a) and (b) hereof; (B) issuance of shares upon exercise of
this
Warrant or the Co-Investor Warrants; (C) issuance of shares upon conversion
of
the 8% Series A Convertible Notes (the “Convertible Notes”); (D) issuance of
shares of Common Stock upon the exercise of Management Options (as defined
in
the Purchase Agreement) or the grant of Management Options provided that the
aggregate number of shares of Common Stock issued and issuable pursuant to
all
Management Options does not exceed 5,242,106; (E) issuance of shares of Common
Stock or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock as
part
of a unit in connection with an arm’s length institutional debt financing; (F)
issuance of shares of Common Stock upon the exercise or conversion or rights,
options, warrants or convertible or exchangeable securities containing the
right
to subscribe for or purchase shares of Common Stock outstanding on the December
13, 2004; (G) issuance of shares of Common Stock or rights, options, warrants
or
convertible or exchangeable securities containing the right to subscribe for
or
purchase shares of Common Stock in connection with licenses,
assignments or other transfers of Intellectual Property of the Company or
Subsidiaries, or rights therein, in connection with cooperative research and
development agreements, strategic alliances, or agreements providing for the
manufacturing, distribution or sale of products or services of the Company
or
Subsidiaries; and (H) contributions of Common Stock to the Company’s 401(k)
Plan.
(iii) In
the
event of any change in the number of shares of Common Stock deliverable or
any
change in the consideration payable to the Company upon exercise, conversion
or
exchange of any Securities (including, without limitation, by operation of
the
anti-dilution provisions of such Securities other than those anti-dilution
provisions contained within the Securities that are substantially similar to
the
provisions of Section 3(a) hereof), any adjustment to the Purchase Price which
was made upon the issuance of such Securities, and any subsequent adjustments
based thereon, shall be recomputed to reflect such change, except as provided
below, no further adjustment shall be made for the actual issuance of Common
Stock or any payment of such consideration upon the exercise, conversion or
exchange of any such Securities.
The
Company shall make all necessary adjustments (including successive adjustments
if required) to the Purchase Price in accordance with Section 3. Upon the
expiration or termination of the right to exercise, convert or exchange any
Securities, any adjustment to the Purchase Price which was made upon the
issuance of such Securities, and any subsequent adjustments based thereon,
shall
be recomputed to reflect the issuance of only the number of shares of Common
Stock actually issued upon the exercise, conversion or exchange of such
Securities and the actual consideration received therefor (as determined in
this
Section 3).
(d) Determination
of Current Market Price.
For the
purpose of any computation under Subsection (b) of this Section 3 or any other
provision of this Warrant except as otherwise specifically provided, the Current
Market Price per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of Common Stock for the 10
consecutive trading days commencing 15 trading days before such date. If on
any
such date the shares of Common Stock are not listed or admitted for trading
on
any national securities exchange or quoted by Nasdaq or a similar service,
then
the Company, on the one hand, and [Great
Point Partners, LLC]
[David
C.
Bupp],
on the
other hand, shall each promptly appoint as an appraiser an individual who shall
be a member of a nationally recognized investment banking firm. Each appraiser
shall be instructed to, within 30 days of appointment, determine the Current
Market Price per share of Common Stock which shall be deemed to be equal to
the
fair market value per share of Common Stock as of such date. If the two
appraisers are unable to agree on the Current Market Price per share of Common
Stock within such 30 day period, then the two appraisers, within 10 days after
the end of such 30 day period shall jointly select a third appraiser. The third
appraiser shall, within 30 days of its appointment, determine, in good faith,
the Current Market Price per share of Common Stock and such determination shall
be controlling. If any party fails to appoint an appraiser or if one of the
two
initial appraisers fails after appointment to submit its appraisal within the
required period, the appraisal submitted by the remaining appraiser shall be
controlling. The cost of the foregoing appraisals shall be shared one-half
by
the Company and one-half by [Great
Point Partners, LLC]
[David
C.
Bupp],
provided, however, in the event a third appraiser is utilized and one of the
two
initial appraisals (but not the other initial appraisal) is greater than or
less
than the appraisal by such third appraiser by 10% or more, then the cost of
all
of the foregoing appraisals shall be borne by the party who appointed the
appraiser who made such initial appraisal.
(e) De
Minimis Adjustments.
No
adjustment shall be made under this Section 3 if the amount of such adjustment
would result in a change in the number of shares issuable under this Warrant
of
less than one percent (1%), but in such case any adjustment that would otherwise
be required to be made shall be carried forward and shall be made at the time
of
and together with the next subsequent adjustment, which together with any
adjustment so carried forward, would result in a change of at least one percent
(1%). Notwithstanding the provisions of the first sentence of this Subsection
3(e), any adjustment postponed pursuant to this Subsection 3(e) shall be made
no
later than the earlier of (i) three years from the date of the transaction
that
would, but for the provisions of the first sentence of this Section 3(e), have
required such adjustment, (ii) an Exercise Date or (iii) the Expiration
Date.
(f) Adjustments
to Other Shares.
In the
event that at any time, as a result of an adjustment made pursuant to Subsection
3(a), the Holder shall become entitled to receive, upon exercise of this
Warrant, any shares of capital stock or other securities of the Company other
than shares of Common Stock, the number of such other shares or other securities
so receivable upon exercise of this Warrant shall be subject to adjustment
from
time to time in a manner and on terms as nearly equivalent as practicable to
the
provisions with respect to the shares of Common Stock contained in Subsections
3(a), (b) and (c), inclusive, and the provisions of Sections 2, 5, 6 and 7
with
respect to the shares of Common Stock shall apply on like terms to any such
other shares or other securities.
(g) Adjustment
of Number of Shares Issuable Upon Exercise.
Upon
each adjustment of the Purchase Price as a result of the calculations made
in
Subsections 3(a), (b) or (c), this Warrant shall thereafter evidence the right
to receive, at the adjusted Purchase Price, that number of shares of Common
Stock (calculated to the nearest one-hundredth) obtained by dividing (x) the
product of the aggregate number of shares of Common Stock covered by this
Warrant immediately prior to such adjustment and the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price by (y) the Purchase
Price in effect immediately after such adjustment of the -Purchase
Price.
(h) Reorganization,
Reclassification, Merger and Sale of Assets.
If
there occurs any capital reorganization or any reclassification of the Common
Stock of the Company, the consolidation or merger of the Company with or into
another Person (other than a merger or consolidation of the Company in which
the
Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of its Common Stock) or the
sale or conveyance of all or substantially all of the assets of the Company
to
another Person, then
the
Holder will thereafter be entitled to receive, upon the exercise of this Warrant
in accordance with the terms hereof, the same kind and amounts of securities
(including shares of stock) or other assets, or both, which were issuable or
distributable to the holders of outstanding Common Stock of the Company upon
such reorganization, reclassification, consolidation, merger, sale or
conveyance, in respect of that number of shares of Common Stock then deliverable
upon the exercise of this Warrant if this Warrant had been exercised immediately
prior to such reorganization, reclassification, consolidation, merger, sale
or
conveyance; and, in any such case, appropriate adjustments (as determined in
good faith by the Board of Directors of the Company) shall be made to assure
that the provisions hereof (including, without limitation, provisions with
respect to changes in, and other adjustments of, the Purchase Price) shall
thereafter be applicable, as nearly as reasonably may be practicable, in
relation to any securities or other assets thereafter deliverable upon exercise
of this Warrant.
4. Certificate
as to Adjustments.
Whenever the Purchase Price or the number of shares of Common Stock issuable,
or
the securities or other property deliverable, upon the exercise of this Warrant
shall be adjusted pursuant to the provisions hereof, the Company shall promptly
give written notice thereof to the Holder, in accordance with Section 13, in
the
form of a certificate signed by the Chairman of the Board, President or one
of
the Vice Presidents of the Company, and by the Chief Financial Officer,
Treasurer or one of the Assistant Treasurers of the Company, stating the
adjusted Purchase Price, the number of shares of Common Stock issuable, or
the
securities or other property deliverable, upon exercise of the Warrant and
setting forth in reasonable detail the method of calculation and the facts
requiring such adjustment and upon which such calculation is based. Each
adjustment shall remain in effect until a subsequent adjustment is
required.
5. Fractional
Shares.
Notwithstanding an adjustment pursuant to Section 3(h) in the number of shares
of Common Stock covered by this Warrant or any other provision of this Warrant,
the Company shall not be required to issue fractions of shares upon exercise
of
this Warrant or to distribute certificates which evidence fractional shares.
In
lieu of fractional shares, the Company may make payment to the Holder, at the
time of exercise of this Warrant as herein provided, of an amount in cash equal
to such fraction multiplied by the greater of the Current Market Price of a
share of Common Stock on the Exercise Date and the Purchase Price.
6. Notice
of Proposed Actions.
In case
the Company shall propose at any time or from time to time (a) to declare or
pay
any dividend payable in stock of any class to the holders of Common Stock or
to
make any other distribution to the holders of Common Stock (other than a
regularly scheduled cash dividend), (b) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other securities, rights,
warrants or options, (c) to effect any reclassification of its Common Stock,
(d)
to effect any consolidation, merger or sale, transfer or other disposition
of
all or substantially all of the property, assets or business of the Company
which would, if consummated, adjust the Purchase Price or the securities
issuable upon exercise of the Warrants, (e) to effect the liquidation,
dissolution or winding up of the Company, or (f) to take any other action that
would require a vote of the Company’s stockholders, then, in each such case, the
Company shall give to the Holder, in accordance with Section 13, a written
notice of such proposed action, which shall specify (i) the record date for
the
purposes of such stock dividend, distribution of rights or warrants or vote
of
the stockholders of the Company, or if a record is not to be taken, the date
as
of which the holders of shares of Common Stock of record to be entitled to
such
dividend, distribution of rights or warrants, or vote is to be determined,
or
(ii) the date on which such reclassification, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution or winding up is expected to
become effective, and such notice shall be so given as promptly as possible
but
in any event at least ten (10) Business Days prior to the applicable record,
determination or effective date specified in such notice.
7. Diminution
or Impairment.
The
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder of this Warrant against diminution or other impairment.
Without limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of stock receivable on the exercise of
this
Warrant above the amount payable therefor on such exercise, (b) will at all
times reserve and keep available the maximum number of its authorized shares
of
Common Stock, free from all preemptive rights therein, which will be sufficient
to permit the full exercise of this Warrant, and (c) will take all such action
as may be necessary or appropriate in order that all shares of Common Stock
as
may be issued pursuant to the exercise of this Warrant will, upon issuance,
be
duly and validly issued, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof.
8. Replacement
of Warrants.
On
receipt by the Company of an affidavit of an authorized representative of the
Holder stating the circumstances of the loss, theft, destruction or mutilation
of this Warrant (and in the case of any such mutilation, on surrender and
cancellation of such Warrant), the Company at its expense will promptly execute
and deliver, in lieu thereof, a new Warrant of like tenor which shall be
exercisable for a like number of shares of Common Stock. If required by the
Company, such Holder must provide an indemnity bond or other indemnity
sufficient in the judgment of the Company to protect the Company from any loss
which it may suffer if a lost, stolen or destroyed Warrant is
replaced.
9. Restrictions
on Transfer.
(a) Subject
to the provisions of this Section 9, this Warrant may be transferred or
assigned, in whole or in part, by the Holder at any time, and from time to
time.
The term “Holder” as used herein shall also include any transferee of this
Warrant whose name has been recorded by the Company in the Warrant Register
(as
hereinafter defined). Each transferee of the Warrant or the Common Stock
issuable upon the exercise of the Warrant acknowledges that the Warrant or
the
Common Stock issuable upon the exercise of the Warrant has not been registered
under the Securities Act and may be transferred only pursuant to an effective
registration under the Securities Act or pursuant to an applicable exemption
from the registration requirements of the Securities Act.
(b) With
respect to a transfer that should occur prior to the time that the Warrant
or
the Common Stock issuable upon the exercise thereof is registered under the
Securities Act, such Holder shall request an opinion of counsel (which shall
be
rendered by counsel reasonably acceptable to the Company) that the proposed
transfer may be effected without registration or qualification under any Federal
or state securities or blue sky law. Counsel shall, as promptly as practicable,
notify the Company and the Holder of such opinion and of the terms and
conditions, if any, to be observed in such transfer, whereupon the Holder shall
be entitled to transfer this Warrant or such shares of Common Stock (or portion
thereof), subject to any other provisions and limitations of this Warrant.
In
the event this Warrant shall be exercised as an incident to such transfer,
such
exercise shall relate back and for all purposes of this Warrant be deemed to
have occurred as of the date of such notice regardless of delays incurred by
reason of the provisions of this Section 9 which may result in the actual
exercise on any later date.
(c) The
Company shall maintain a register (the “Warrant Register”) in its principal
office for the purpose of registering the Warrant and any transfer thereof,
which register shall reflect and identify, at all times, the ownership of any
interest in the Warrant. Upon the issuance of this Warrant, the Company shall
record the name of the initial purchaser of this Warrant in the Warrant Register
as the first Holder. Upon surrender for registration of transfer or exchange
of
this Warrant together with a properly executed Form of Assignment attached
hereto as Exhibit B at the principal office of the Company, the Company shall,
at its expense, execute and deliver one or more new Warrants of like tenor
which
shall be exercisable for a like aggregate number of shares of Common Stock,
registered in the name of the Holder or a transferee or
transferees.
10. No
Rights or Liability as a Stockholder.
This
Warrant does not entitle the Holder hereof to any voting rights or other rights
as a stockholder of the Company. No provisions hereof, in the absence of
affirmative action by the Holder hereof to purchase Common Stock, and no
enumeration herein of the rights or privileges of the Holder shall give rise
to
any liability of such Holder as a stockholder of the Company.
11. Charges,
Taxes and Expenses.
Issuance of certificates for shares of Common Stock upon the exercise of this
Warrant shall be made without charge to the Holder hereof for any issue or
transfer tax, or other incidental expense, in respect of the issuance or
delivery of such certificates or the securities represented thereby, all of
which taxes and expenses shall be paid by the Company.
12. Amendment
or Waiver.
Any
amendment, supplement or modification of or to any provision of this Warrant,
any waiver of any provision of this Warrant, and any consent to any departure
by
any party from the terms of any provision of this Warrant, may be made only
in
the manner provided in Section 11.4 of the Purchase Agreement, and then such
amendment, supplement, modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
13. Notices.
Any
notice or other communication (or delivery) required or permitted hereunder
shall be made in writing and shall be by registered mail, return receipt
requested, telecopier, courier service or personal delivery to the Company
at
its principal office as specified in Section 11.2 of
the
Purchase Agreement and to the Holder at its address as it appears in the Warrant
Register. All such notices and communications (and deliveries) shall be deemed
to have been duly given: when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial overnight courier service;
five
Business Days after being deposited in the mail, postage prepaid, if mailed;
and
when receipt is acknowledged, if telecopied.
14. Company
Call.
(a) The
Company shall have the right exercisable at any time, and from time to time,
to
repurchase, subject to the terms and conditions hereof, from the Holder all,
but
not less than all, of this Warrant at the purchase price determined below,
provided that the average Closing Prices per share of Common Stock for the
30
consecutive trading days ending 15 trading days before the date the Call Notice
(as defined in the next sentence) is given, is at least $1.50 per share (subject
to adjustment as set forth in Section 14(c) below) (the “Target Price”). Such
right shall be exercisable by the Company by delivery of written notice (a
“Call
Notice”) to the Holder (and to all holders of the Co-Investor Warrants),
specifying the date on which such repurchase shall occur, which date shall
not
be less than thirty (30) days nor more than sixty (60) days after the date
of
the Call Notice. The purchase price under this Section 14 shall be determined
by
multiplying (a) $0.46 (subject
to adjustment pursuant to Section 14(c) below) (the “Call Price”) by (b) the
number of Issuable Warrant Shares at the time issuable upon the exercise of
this
Warrant. The Call Notice shall (i) designate the date of repurchase in
accordance with this Section 14 (the “Repurchase Date”) and (ii) state that
the right to exercise the Warrant shall terminate at 5:00 p.m. New York City
time on the business day immediately preceding the Repurchase Date.
(b) Any
right
to exercise this Warrant shall terminate at 5:00 pm New York City time on the
business day immediately preceding the Repurchase Date. On and after the
Repurchase Date, the Holder shall have no further rights except to receive
upon
delivery of this Warrant, the amounts provided for in this Warrant.
(c) The
Target Price and the Call Price shall be adjusted in the same manner as the
Purchase Price pursuant to Section 3(a) above.
15. Certain
Remedies.
The
Holder shall be entitled to an injunction or injunctions to prevent breaches
of
the provisions of this Warrant and to enforce specifically the terms and
provisions of this Warrant in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to
which
such Holder may be entitled at law or in equity.
16. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED
UNDER, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS OR INSTRUMENTS
ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE EXCEPT TO THE EXTENT
THE
GENERAL CORPORATIONS LAW OF DELAWARE SHALL APPLY.
17. Headings.
The
headings in this Warrant are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
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NEOPROBE
CORPORATION |
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By: |
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Name: |
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Title: |
[SIGNATURE
PAGE TO WARRANT]
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Exhibit
A to Common
Stock
Purchase Warrant
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[FORM
OF]
ELECTION
TO PURCHASE SHARES
The
undersigned hereby irrevocably elects to exercise the Warrant to purchase _____
shares of Common Stock, par value $0.001 per share (“Common Stock”), of Neoprobe
Corporation (the “Company”) and hereby [makes payment of $_______ therefor] [or]
[makes payment therefor by assignment to the Company pursuant to Section
2(b)(ii) of the Warrant of $_____________ aggregate principal amount of
Convertible Note (as defined in the Warrant)] [or] [makes payment therefore
by
surrendering pursuant to Section 2(b)(iii) _____ shares of Common Stock of
the
Company] [or] [makes payment therefor by cancellation pursuant to Section
2(b)(iv) of a portion of the Warrant with respect to _________ shares of Common
Stock]. The undersigned hereby requests that certificates for such shares be
issued and delivered as follows:
| ISSUE
TO: |
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(NAME)
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(ADDRESS,
INCLUDING ZIP CODE)
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(SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER)
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| DELIVER
TO: |
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(NAME)
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(ADDRESS,
INCLUDING ZIP
CODE)
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If
the
number of shares of Common Stock purchased hereby is less than the number of
shares of Common Stock covered by the Warrant, the undersigned requests that
a
new Warrant representing the number of shares of Common Stock not purchased
be
issued and delivered as follows:
| ISSUE
TO: |
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(NAME
OF HOLDER)
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(ADDRESS,
INCLUDING ZIP CODE)
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| DELIVER
TO: |
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(NAME
OF HOLDER)
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(ADDRESS,
INCLUDING ZIP
CODE)
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| Dated:
________________ |
[NAME
OF
HOLDER] |
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By: |
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Name: |
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Title: |
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1
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Name
of Holder must conform in all respects to name of Holder as specified
on
the face of the Warrant.
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Exhibit
B to Common
Stock
Purchase Warrant
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[FORM
OF]
ASSIGNMENT
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers unto the Assignee
named below all of the rights of the undersigned to purchase Common Stock,
par
value $.001 per share (“Common Stock”), of Neoprobe Corporation represented by
the Warrant, with respect to the number of shares of Common Stock set forth
below:
| Name of Assignee |
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Address |
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No. of Shares |
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and
does
hereby irrevocably constitute and appoint ____________________________ Attorney
to make such transfer on the books of Neoprobe Corporation maintained for that
purpose, with full power of substitution in the premises.
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| Dated:
________________ |
[NAME
OF
HOLDER1] |
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By: |
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Name: |
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Title: |
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1
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Name
of Holder must conform in all respects to name of Holder as specified
on
the face of the Warrant.
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