Exhibit 10.2

THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN
OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
THE MAKER THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.

NEOPROBE CORPORATION

Amended and Restated 10% Series A Senior Secured Convertible Promissory Note
due December 26, 2011

No: 1A
$7,000,000.00

Dated: December 26, 2007
Amended and Restated: July 24, 2009

For value received, NEOPROBE CORPORATION, a Delaware corporation (the “Maker”),
hereby promises to pay to the order of Platinum-Montaur Life Sciences, LLC, 152
West 57th Street, New York, NY 10019 (together with its successors,
representatives and permitted assigns, the “Holder”), in accordance with the
terms hereinafter provided, the principal amount of Seven Million and 00/100
Dollars ($7,000,000), together with interest thereon. This Note is being issued
pursuant to the Purchase Agreement, and the Exchange Agreement (as those terms
are defined in Section 1.1 hereof).  Upon satisfaction of conditions set forth
in the Purchase Agreement, the Maker issued to the Holder the Maker’s 10% Series
B Senior Secured Convertible Promissory Note (“Series B Note”) and shares of the
Maker’s 8% Series A Convertible Preferred Stock (“Preferred Stock”). This Note
and the Series B Note, as amended and restated in connection with the Exchange
Agreement, are collectively referred to herein as the “Notes.”

All payments under or pursuant to this Note shall be made in United States
Dollars in immediately available funds to the Holder at the address of the
Holder first set forth above or at such other place as the Holder may designate
from time to time in writing to the Maker or by wire transfer of funds to the
Holder’s account, instructions for which are attached hereto as Exhibit A . The
outstanding principal balance of this Note shall be due and payable on December
26, 2011 (the “Maturity Date”) or at such earlier time as provided herein.

ARTICLE I
 
PAYMENT TERMS

1.1           Purchase Agreement.  This Note has been executed and delivered
pursuant to the Securities Purchase Agreement, dated as of December 26, 2007
(the “Purchase Agreement ”), and the Securities Amendment and Exchange
Agreement, dated as of July 24, 2009 (the “Exchange Agreement”), each by and
among the Maker and the purchasers listed therein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth for such terms in
the Purchase Agreement.

 
 

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1.2           Interest. Beginning on the original issuance date of this Note
(the “Issuance Date”), the outstanding principal balance of this Note shall bear
interest, in arrears, at a rate per annum equal to ten percent (10%), payable
monthly on the first day of each calendar month (each, an “Interest Payment
Date”) commencing February 1, 2008, at the option of the Maker in (A) cash or
(B) in registered shares of Common Stock; provided, however, (i) payment of
interest in shares of Common Stock may only occur if during the 20 Trading Days
immediately prior to the applicable Interest Payment Date and through and
including the date such shares of Common Stock are issued to the Holder all of
the Equity Conditions, unless waived by the Holder in writing, have been met and
the Maker shall have given the Holder notice in accordance with the notice
requirements set forth below, and (ii) as to such Interest Payment Date, within
two days after the Interest Payment Date the Maker shall cause the physical
delivery to the Holder of a certificate representing the number of shares of
Common Stock to be applied against such interest payment equal to the quotient
of (x) the applicable interest payment divided by (y) 90% of the average VWAP
for the five (5) Trading Days immediately preceding the Interest Payment Date. 
Interest shall be computed on the basis of a 360-day year of twelve (12) 30-day
months, shall compound monthly and shall accrue commencing on the Issuance
Date.  Furthermore, upon the occurrence of an Event of Default (as defined in
Section 2.1 hereof), the Maker will pay interest to the Holder, payable on
demand, on the outstanding principal balance of and unpaid interest on the Note
from the date of the Event of Default until such Event of Default is cured at
the rate of the lesser of thirteen percent (13%) and the maximum applicable
legal rate per annum.   Notwithstanding the above, the Maker may not issue a
number of shares of Common Stock in excess of the Maximum Monthly Interest Share
Amount toward the payment of Interest, as to all outstanding Series A Notes and
Series B Notes, in the aggregate, during any rolling twenty (20) Trading Day
period. For purposes hereof, “Maximum Monthly Interest Share Amount” means 20%
of the aggregate dollar trading volume (as reported on Bloomberg) of the Common
Stock on the principal Trading Market over the twenty (20) consecutive Trading
Day period immediately prior to the applicable Interest Payment Date.
 
1.3           Payment of Principal; No Prepayment.   The Principal Amount hereof
shall be paid in full on the Maturity Date or, if earlier, upon acceleration of
this Note in accordance with the terms hereof. Any amount of principal repaid
hereunder may not be reborrowed.  The Maker may not prepay any portion of the
principal amount of this Note without the prior written consent of the Holder,
which may be withheld in the Holder’s sole and absolute discretion.
 
1.4           Security Agreement.   The obligations of the Maker hereunder are
secured by a continuing security interest in certain assets of the Maker
pursuant to the terms of a Security Agreement dated as of December 26, 2007 by
and between the Maker and the Holder, a Patent, Trademark and Copyright Security
Agreement, dated as of December 26, 2007, by and among the Maker and the Maker’s
subsidiaries, on the one hand, and the Holder, on the other hand, and a Blocked
Account Control Agreement (“Account Control Agreement”) among the Maker, the
Holder and U.S. Bank National Association (“Bank”), pursuant to the terms of
Section 5.15 of the Purchase Agreement.

 
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1.5           Payment on Non-Business Days.   Whenever any payment to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due on the next succeeding business day
and such next succeeding day shall be included in the calculation of the amount
of accrued interest payable on such date.
 
1.6           Transfer.   This Note may be transferred or sold, subject to the
provisions of Section 5.8 hereof, or pledged, hypothecated or otherwise granted
as security by the Holder.
 
1.7           Replacement.   Upon receipt of a duly executed, notarized and
unsecured written statement from the Holder with respect to the loss, theft or
destruction of this Note (or any replacement hereof) and a standard indemnity,
or, in the case of a mutilation of this Note, upon surrender and cancellation of
such Note, the Maker shall issue a new Note, of like tenor and amount, in lieu
of such lost, stolen, destroyed or mutilated Note.
 
1.8           Use of Proceeds.   The Maker shall use the proceeds of this Note
as set forth in the Purchase Agreement.
 
1.9           Allocation of Payments.  All payments to each of the Series A
Holders under the Series A Notes shall be made pro rata among the Series A
Holders based upon the aggregate unpaid principal amount of the Series A Notes
held by them.
 
ARTICLE II
 
EVENTS OF DEFAULT; REMEDIES

2.1           Events of Default. The occurrence of any of the following events
shall be an “Event of Default” under this Note:
 
(a)           any default in the payment of (i) the principal amount hereunder
when due, or (ii) interest on, or liquidated damages in respect of, this Note,
as and when the same shall become due and payable (whether on the Maturity Date
or by acceleration or otherwise); or
 
(b)           the suspension from listing, without subsequent listing on any one
of, or the failure of the Common Stock to be listed on at least one of the OTC
Bulletin Board, the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Global Market, the Nasdaq Capital Market or The New York Stock
Exchange, Inc. for a period of more than five (5) consecutive Trading Days; or
 
(c)           the Maker shall fail to (i) timely deliver the shares of Common
Stock upon conversion of the Note or any interest accrued and unpaid, (ii) file
a Registration Statement in accordance with the terms of the Registration Rights
Agreement or (iii) make the payment of any fees or other payments due under this
Note, the Purchase Agreement, the Registration Rights Agreement or the other
Transaction Documents, which failure is not remedied within five (5) business
days after such performance is due; or

 
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(d)           while the Registration Statement is required to be maintained
effective pursuant to the terms of the Registration Rights Agreement, the
effectiveness of the Registration Statement (as defined in the Registration
Rights Agreement) lapses for any reason (including, without limitation, the
issuance of a stop order) or is unavailable to the Holder for sale of the
Registrable Securities (as defined in the Registration Rights Agreement) as
provided in the Registration Rights Agreement (other than as a result of any
breach of the Registration Rights Agreement or violation of law by any holder of
the Notes, or their agents or Affiliates), and such lapse or unavailability
continues for a period of ten (10) consecutive Trading Days,  provided  that the
Maker has not exercised its rights pursuant to Section 3(n) of the Registration
Rights Agreement; or
 
(e)           default shall be made in the performance or observance of (i) any
covenant, condition or agreement contained in this Note (other than is set forth
in (a) through (d) above) and such default is not cured within ten (10) days
after the earlier of (A) the date the Maker receives notice from the Holder of
the occurrence thereof or (B) the date on which the Maker knew or should have
known, if it had exercised reasonable diligence, of such default, or (ii) any
material covenant, condition or agreement contained in the Purchase Agreement,
Registration Rights Agreement, the Series B Note, or any other Transaction
Document that is not covered by any other provisions of this Section 2.1 and
such default is not cured within ten (10) days after the earlier of (A) the date
the Maker receives notice from the Holder of the occurrence thereof or (B) the
date on which the Maker knew or should have known, if it had exercised
reasonable diligence, of such default; or
 
(f)           any material representation or warranty made by the Maker herein
or in the Purchase Agreement, the Series B Note or any other Transaction
Document shall prove to have been false or incorrect or breached in a material
respect on the date as of which made; or
 
(g)           the Maker shall (i) default in any payment of any amount or
amounts of principal of or interest on any Indebtedness (other than the
Indebtedness hereunder) the aggregate principal amount of which Indebtedness, in
the aggregate, exceeds $100,000, which default entitles the holder or holders of
such Indebtedness to accelerate the maturity thereof, or (ii) default in the
observance or performance of any other agreement or condition relating to any
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, which
default, event or condition continues beyond any applicable cure period, and the
effect of which default, event or condition is to cause, or to permit the holder
or holders or beneficiary or beneficiaries of such Indebtedness to cause with
the giving of notice if required, such Indebtedness to become due prior to its
stated maturity; or
 
(h)           the Maker shall (i) 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 or assets, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in effect) or
under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) admit in writing its inability to pay its debts as they become due, or
(vii) take any action under the laws of any jurisdiction (foreign or domestic)
analogous to any of the foregoing; or

 
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(i)           a proceeding or case shall be commenced in respect of the Maker,
without its application or consent, in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, moratorium, dissolution, winding
up, or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets in connection with the liquidation or dissolution
of the Maker, or (iii) similar relief in respect of it under any law providing
for the relief of debtors, and such proceeding or case described in clause (i),
(ii) or (iii) shall continue undismissed, or unstayed and in effect, for a
period of sixty (60) days or any order for relief shall be entered in an
involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic)
against the Maker or action under the laws of any jurisdiction (foreign or
domestic) analogous to any of the foregoing shall be taken with respect to the
Maker and shall continue undismissed, or unstayed and in effect for a period of
sixty (60) days; or
 
(j)           at any point after 135 vital blue dye lymph nodes have been
obtained from patients who have completed surgery and injection of the drug in
the Phase 3 clinical trial of Lymphoseek (NEO3-05), the failure of Maker to
achieve the primary objective in such trial of efficacy of Lymphoseek, which is
the concordance of in-vivo detection rate of Lymphoseek and vital blue dye in
tumor-draining sentinel lymph nodes as confirmed by pathology in at least
ninety-three percent (93%) of such patients, determined in good faith by the
Company and the Holder following a review of the unaudited trial data; or
 
(k)           the Bank shall provide written notice to the Maker or Holder of
the Bank’s termination of the Account Control Agreement, and the Maker does not
within forty-five (45) days following such notice (i) establish a replacement
blocked account pursuant to Section 5.15 of the Purchase Agreement with another
financial institution, on substantially the same terms contained in the Account
Control Agreement, or as otherwise reasonably acceptable to Maker and Holder
(the “Replacement Account”), (ii) transfer all funds held in the account subject
to the Account Control Agreement to the Replacement Account, and (iii) provide
evidence to the Holder that an instruction letter, substantially in the form of
the Instruction Letter attached as Exhibit M to the Purchase Agreement, has been
executed by each of the Maker and Ethicon, irrevocably instructing Ethicon to
make payments under the Ethicon Agreement to the Replacement Account; or
 
(l)           the occurrence of any default or event of default under any other
Note or the failure by the Maker to comply with its material obligations under
the Certificate of Designations governing the terms of the Preferred Stock.

 
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2.2           Remedies Upon An Event of Default.  If an Event of Default shall
have occurred and shall be continuing, the Holder of this Note may at any time
at its option declare the entire unpaid principal balance of this Note, together
with all interest accrued hereon, due and payable, and thereupon, the same shall
be accelerated and so due and payable, without presentment, demand, protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived
by the Maker; provided, however, that upon the occurrence of an Event of Default
described above, the Holder, in its sole and absolute discretion, may (a) demand
that the entire principal amount of this Note then outstanding and all accrued
and unpaid interest thereon shall be converted into shares of Common Stock at
the applicable Conversion Price per share on the Trading Day immediately
preceding the date the Holder demands conversion pursuant to this clause, or (b)
exercise or otherwise enforce any one or more of the Holder’s rights, powers,
privileges, remedies and interests under this Note (including, if applicable,
pursuant to Section 3.7 hereof), the Purchase Agreement, the Registration Rights
Agreement or applicable law.  No course of delay on the part of the Holder shall
operate as a waiver thereof or otherwise prejudice the right of the Holder. No
remedy conferred hereby shall be exclusive of any other remedy referred to
herein or now or hereafter available at law, in equity, by statute or otherwise.
No notice or other action of Holder shall be required in the case of an Event of
Default set forth in Sections 2.1(h) or (i), and, in such event, the outstanding
principal balance and accrued interest hereunder shall be automatically due and
payable.
 
ARTICLE III
 
CONVERSION; ANTIDILUTION

3.1           Conversion Option.  At any time and from time to time on or after
the Issuance Date:
 
(a)           up to Three Million Five Hundred Thousand and 00/100 Dollars of
the outstanding principal balance of this Note (the “First Conversion Tranche”)
shall be convertible (in whole or in part and from time to time), at the option
of the Holder (the “First Conversion Option”), into such number of fully paid
and non-assessable shares of Common Stock (the “First Conversion Rate”) as is
determined by dividing (x) that portion of the First Conversion Tranche as of
such date that the Holder elects to convert by (y) the First Tranche Conversion
Price (as defined in Section 3.2 hereof) then in effect on the date on which the
Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to
the Maker (facsimile number (614) 793-7520, Attn.: Brent L. Larson, Vice
President - Finance) (the “Conversion Date”); and
 
(b)           up to an additional Three Million Five Hundred Thousand and 00/100
Dollars of the outstanding principal balance of this Note (the “Second
Conversion Tranche”) shall be convertible (in whole or in part and from time to
time), at the option of the Holder (the “Second Conversion Option”), into such
number of fully paid and non-assessable shares of Common Stock (the “Second
Conversion Rate”) as is determined by dividing (x) that portion of the Second
Conversion Tranche as of such date that the Holder elects to convert by (y) the
Second Tranche Conversion Price (as defined in Section 3.2 hereof) then in
effect on the Conversion Date,

provided, however, that the First and Second Tranche Conversion Prices shall be
subject to adjustment as described in Section 3.5 below.  The Holder shall
deliver this Note to the Maker at the address designated in the Purchase
Agreement at such time that this Note is fully converted. With respect to
partial conversions of this Note, the Maker shall keep written records of the
amount of this Note converted as of each Conversion Date.

 
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3.2           Conversion Price. The term “First Tranche Conversion Price” shall
mean $0.26, subject to adjustment under Section 3.5 hereof. The term “Second
Tranche Conversion Price” shall mean $0.9722, subject to adjustment under
Section 3.5 hereof. The First and Second Tranche Conversion Prices are
hereinafter referred to collectively as the “Conversion Prices.”
 
3.3           Mechanics of Conversion.
 
(a)           Not later than three (3) Trading Days after any Conversion Date,
the Maker or its designated transfer agent, as applicable, shall issue and
deliver to the Depository Trust Company (“DTC”) account on the Holder’s behalf
via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified in the
Conversion Notice, the number of shares of Common Stock to which the Holder
shall be entitled upon such conversion, registered in the name of the Holder or
its designee.  In the alternative, not later than three (3) Trading Days after
any Conversion Date, the Maker shall deliver to the applicable Holder by express
courier a certificate or certificates which shall be free of restrictive legends
and trading restrictions (other than those required pursuant to the Purchase
Agreement) representing the number of shares of Common Stock being acquired upon
the conversion of this Note (the “Delivery Date”). Notwithstanding the foregoing
to the contrary, the Maker or its transfer agent shall only be obligated to
issue and deliver the shares to the DTC on the Holder’s behalf via DWAC (or
certificates free of restrictive legends) if such conversion is in connection
with a sale by the Holder and the Holder has complied with the applicable
prospectus delivery requirements or an exemption from such registration
requirements (each as evidenced by documentation furnished to and reasonably
satisfactory to the Maker). If in the case of any Conversion Notice such
certificate or certificates are not delivered to or as directed by the Holder by
the Delivery Date, the Holder shall be entitled by written notice to the Maker
at any time on or before its receipt of such certificate or certificates
thereafter, to rescind such conversion, in which event the Maker shall
immediately return this Note tendered for conversion, whereupon the Maker and
the Holder shall each be restored to their respective positions immediately
prior to the delivery of such notice of revocation, except that any amounts
described in Sections 3.3(b) and (c) shall be payable through the date notice of
rescission is given to the Maker.
 
(b)           The Maker understands that a delay in the delivery of the shares
of Common Stock upon conversion of this Note beyond the Delivery Date could
result in economic loss to the Holder. If the Maker fails to deliver to the
Holder such shares via DWAC (or, if applicable, certificates), or fails to
deliver unlegended certificates representing such shares if required pursuant to
Section 3.3(a) hereof, by the Delivery Date, the Maker shall pay to such Holder,
in cash, an amount per Trading Day for each Trading Day until such shares are
delivered via DWAC or certificates are delivered (if applicable), together with
interest on such amount at a rate of 10% per annum, accruing until such amount
and any accrued interest thereon is paid in full, equal to the greater of (A)
(i) 1% of the aggregate principal amount of the Notes requested to be converted
for the first five (5) Trading Days after the Delivery Date and (ii) 2% of the
aggregate principal amount of the Notes requested to be converted for each
Trading Day thereafter and (B) $2,000 per day (which amount shall be paid as
liquidated damages and not as a penalty). Nothing herein shall limit a Holder’s
right to pursue actual damages for the Maker’s failure to deliver certificates
representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to
it at law or in equity (including, without limitation, a decree of specific
performance and/or injunctive relief). Notwithstanding anything to the contrary
contained herein, the Holder shall be entitled to withdraw a Conversion Notice,
and upon such withdrawal the Maker shall only be obligated to pay the liquidated
damages accrued in accordance with this Section 3.3(b) through the date the
Conversion Notice is withdrawn.

 
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3.4           Ownership Cap and Certain Conversion Restrictions.
 
(a)           Notwithstanding anything to the contrary set forth in Section 3 of
this Note, at no time may the Holder convert all or a portion of this Note if
the number of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock owned by the
Holder at such time, the number of shares of Common Stock which would result in
the Holder beneficially owning (as determined in accordance with Section 13(d)
of the Exchange Act and the rules thereunder) more than 4.99% of all of the
Common Stock outstanding at such time; provided, however, that upon the Holder
providing the Maker with sixty-one (61) days notice (pursuant to Section 4.1
hereof) (the “Waiver Notice”) that the Holder waives the limitations contained 
in this Section 3.4(a) with regard to any or all shares of Common Stock issuable
upon conversion of this Note, this Section 3.4(a) will be of no force or effect
with regard to all or a portion of the Note referenced in the Waiver Notice.
 
(b)           Notwithstanding anything to the contrary set forth in Section 3 of
this Note, at no time may the Holder convert all or a portion of this Note if
the number of shares of Common Stock to be issued pursuant to such conversion,
when aggregated with all other shares of Common Stock owned by the Holder at
such time, would result in the Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 9.99% of the then issued and outstanding shares of Common Stock
outstanding at such time;  provided,  however, that upon the Holder providing
the Maker with a Waiver Notice that the Holder waives the limitations contained
in this Section 3.4(b) with regard to any or all shares of Common Stock issuable
upon conversion of this Note, this Section 3.4(b) shall be of no force or effect
with regard to all or a portion of the Note referenced in the Waiver Notice.
 
(c)           Notwithstanding the above, the provisions of Section 3.4(a) and
3.4(b) shall not be applicable when calculating any adjustment to the Conversion
Prices hereunder or any other adjustments under Section 3.5 hereof.

3.5           Adjustment of Conversion Prices.
 
(a)           Until the Note has been paid in full or converted in full, each of
the Conversion Prices shall be subject to adjustment from time to time as
follows (but shall not be increased, other than pursuant to Section 3.5(a)(i)
hereof):
 
(i)           Adjustments for Stock Splits and Combinations.  If the Maker shall
at any time or from time to time after the Issuance Date, effect a stock split
of the outstanding Common Stock, the applicable Conversion Prices in effect
immediately prior to the stock split shall be proportionately decreased.  If the
Maker shall at any time or from time to time after the Issuance Date, combine
the outstanding shares of Common Stock, the applicable Conversion Prices in
effect immediately prior to the combination shall be proportionately increased.
Any adjustments under this Section 3.5(a)(i) shall be effective at the close of
business on the date the stock split or combination occurs.

 
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(ii)            Adjustments for Certain Dividends and Distributions.   If the
Maker shall at any time or from time to time after the Issuance Date, make or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock, then, and in each event, the applicable Conversion Prices in effect
immediately prior to such event shall be decreased as of the time of such
issuance or, in the event such record date shall have been fixed, as of the
close of business on such record date, by multiplying each of the applicable
Conversion Prices then in effect by a fraction:
 
(A)           the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date; and
 
(B)           the denominator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution.
 
(iii)           Adjustment for Other Dividends and Distributions.   If the Maker
shall at any time or from time to time after the Issuance Date, make or issue or
set a record date for the determination of holders of Common Stock entitled to
receive a dividend or other distribution payable in securities of the Maker or
any other Person other than shares of Common Stock, then, and in each event, an
appropriate revision to the applicable Conversion Prices shall be made and
provision shall be made (by adjustments of the Conversion Prices or otherwise)
so that the holders of this Note shall receive upon conversions thereof, in
addition to the number of shares of Common Stock receivable thereon, the number
of securities of the Maker or other issuer (as applicable) which they would have
received had this Note been converted into Common Stock on the date of such
event and had thereafter, during the period from the date of such event to and
including the Conversion Date, retained such securities (together with any
distributions payable thereon during such period), giving application to all
adjustments called for during such period under this Section 3.5(a)(iii) with
respect to the rights of the holders of this Note; provided, however, that if
such record date shall have been fixed and such dividend is not fully paid or if
such distribution is not fully made on the date fixed therefor, the Conversion
Prices shall be adjusted pursuant to this paragraph as of the time of actual
payment of such dividends or distributions.

 
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(iv)          Adjustments for Reclassification, Exchange or Substitution.    If
the Common Stock issuable upon conversion of this Note at any time or from time
to time after the Issuance Date shall be changed to the same or different number
of shares of any class or classes of stock, whether by reclassification,
exchange, substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends provided for in Sections 3.5(a)(i),
(ii) and (iii), or a reorganization, merger, consolidation, or sale of assets
provided for in Section 3.5(a)(v)), then, and in each event, an appropriate
revision to the Conversion Prices shall be made and provisions shall be made (by
adjustments of the Conversion Prices or otherwise) so that the Holder shall have
the right thereafter to convert this Note into the kind and amount of shares of
stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such Note might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein.
 
(v)           Adjustments for Reorganization, Merger, Consolidation or Sales of
Assets.   If at any time or from time to time after the Issuance Date there
shall be a capital reorganization of the Maker (other than by way of a stock
split or combination of shares or stock dividends or distributions provided for
in Section 3.5(a)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 3.5(a)(iv)), or a merger or
consolidation of the Maker with or into another corporation where the holders of
outstanding voting securities prior to such merger or consolidation do not own
over fifty percent (50%) of the outstanding voting securities of the merged or
consolidated entity, immediately after such merger or consolidation, or the sale
of all or substantially all of the Maker’s properties or assets to any other
person (an “Organic Change”), then as a part of such Organic Change, (A) if the
surviving entity in any such Organic Change has a class of equity securities
registered under the Exchange Act, and its common stock is listed or quoted on a
national exchange or the OTC Bulletin Board, an appropriate revision to the
Conversion Prices shall be made and provision shall be made (by adjustments of
the Conversion Prices or otherwise) so that the Holder shall have the right
thereafter to convert such Note into the kind and amount of shares of stock and
other securities or property of the Maker or any successor corporation resulting
from such Organic Change, and (B) if the surviving entity in any such Organic
Change does not have a class of equity securities registered under the Exchange
Act, or its common stock is not listed or quoted on a national exchange or the
OTC Bulletin Board, the Holder shall have the right to accelerate the maturity
of this Note.  In any case referenced in clause (A) above, appropriate
adjustment shall be made in the application of the provisions of this Section
3.5(a)(v) with respect to the rights of the Holder after the Organic Change to
the end that the provisions of this Section 3.5(a)(v) (including any adjustment
in the applicable Conversion Prices then in effect and the number of shares of
stock or other securities deliverable upon conversion of this Note) shall be
applied after that event in as nearly an equivalent manner as may be
practicable.
 
(b)          Record Date. In case the Maker shall take record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
Common Stock or Convertible Securities, then the date of the issue or sale of
the shares of Common Stock shall be deemed to be such record date.
 
(c)           [Reserved]

 
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(d)           No Impairment.   The Maker shall 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
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Maker, but will at all
times in good faith, assist in the carrying out of all the provisions of this
Section 3.5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the Holder against
impairment.
 
(e)           Certificates as to Adjustments.   Upon occurrence of each
adjustment or readjustment of either of the Conversion Prices or number of
shares of Common Stock issuable upon conversion of this Note pursuant to this
Section 3.5, the Maker at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and readjustment, showing in detail
the facts upon which such adjustment or readjustment is based. The Maker shall,
upon written request of the Holder, at any time, furnish or cause to be
furnished to the Holder a like certificate setting forth such adjustments and
readjustments, the applicable Conversion Prices in effect at the time, and the
number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon the conversion of this Note.
Notwithstanding the foregoing, the Maker shall not be obligated to deliver a
certificate unless such certificate would reflect an increase or decrease of at
least one percent (1%) of such adjusted amount.
 
(f)           Issue Taxes.   The Maker shall pay any and all issue and other
taxes, excluding federal, state or local income taxes, that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of this
Note pursuant thereto; provided, however, that the Maker shall not be obligated
to pay any transfer taxes resulting from any transfer requested by the Holder in
connection with any such conversion.
 
(g)           Fractional Shares.   No fractional shares of Common Stock shall be
issued upon conversion of this Note. In lieu of any fractional shares to which
the Holder would otherwise be entitled, the Maker shall pay cash equal to the
product of such fraction multiplied by the average of the Closing Prices of the
Common Stock for the five (5) consecutive Trading Days immediately preceding the
Conversion Date.
 
(h)           Regulatory Compliance.   If any shares of Common Stock to be
reserved for the purpose of conversion of this Note or any interest accrued
thereon require registration or listing with or approval of any governmental
authority, stock exchange or other regulatory body under any federal or state
law or regulation or otherwise before such shares may be validly issued or
delivered upon conversion, the Maker shall, at its sole cost and expense, in
good faith and as expeditiously as possible, endeavor to secure such
registration, listing or approval, as the case may be.
 
3.6           Inability to Fully Convert.
 
(a)           Holder’s Option if Maker Cannot Fully Convert.   If, upon the
Maker’s receipt of a Conversion Notice, the Maker cannot issue shares of Common
Stock registered for resale under the Registration Statement if required
pursuant to the Registration Rights Agreement for any reason, including, without
limitation, because the Maker (i) does not have a sufficient number of shares of
Common Stock authorized and available, (ii) is otherwise prohibited by
applicable law or by the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Maker or any of its securities from issuing all of the Common Stock which is
to be issued to the Holder pursuant to a Conversion Notice or (iii) fails to
have a sufficient number of shares of Common Stock registered for resale under
the Registration Statement, then the Maker shall issue as many shares of Common
Stock as it is able to issue in accordance with the Holder’s Conversion Notice
and, with respect to the unconverted portion of this Note, the Holder, solely at
Holder’s option (and in addition to all other remedies hereunder), can elect to:

 
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(A)           require the Maker to prepay that portion of this Note for which
the Maker is unable to issue Common Stock in accordance with the Holder’s
Conversion Notice (the “Mandatory Prepayment”) in an amount equal to one hundred
twenty-five percent (125% of the portion of aggregate principal amount of this
Note that Maker was unable to convert to Common Stock (the “Mandatory Prepayment
Price”);
 
(B)            if the Maker’s inability to fully convert is pursuant to Section
3.6(a)(iii) above, require the Maker to issue restricted shares of Common Stock
in accordance with such holder’s Conversion Notice; or
 
(C)           void its Conversion Notice and retain or have returned, as the
case may be, this Note that was to be converted pursuant to the Conversion
Notice (provided that the Holder’s voiding its Conversion Notice shall not
effect the Maker’s obligations to make any payments which have accrued prior to
the date of such notice).
 
(b)           Mechanics of Fulfilling Holder’s Election.   The Maker shall
immediately send via facsimile to the Holder, upon receipt of a facsimile copy
of a Conversion Notice from the Holder which cannot be fully satisfied as
described in Section 3.6(a) above, a notice of the Maker’s inability to fully
satisfy the Conversion Notice (the “Notice of Inability to Convert”). Such
Inability to Convert Notice shall indicate (i) the reason why the Maker is
unable to fully satisfy such holder’s Conversion Notice, (ii) the amount of this
Note which cannot be converted, and (iii) the applicable Mandatory Prepayment
Price. The Holder shall notify the Maker of its election pursuant to Section
3.6(a) above by delivering written notice via facsimile to the Maker (“Election
Upon Inability to Convert”).
 
(c)           Payment of Prepayment Price.   If the Holder shall elect to have
its Notes prepaid pursuant to Section 3.6(a)(A) above, the Maker shall pay the
Mandatory Prepayment Price to the Holder within thirty (30) days of the Maker’s
receipt of the Holder’s Election Upon Inability to Convert,  provided  that
prior to the Maker’s receipt of the Holder’s Election Upon Inability to Convert
the Maker has not delivered a notice to the Holder stating, to the satisfaction
of the Holder, that the event or condition resulting in the Mandatory Prepayment
has been cured and all Conversion Shares issuable to the Holder can and will be
delivered to the Holder in accordance with the terms of this Note. If the Maker
shall fail to pay the applicable Mandatory Prepayment Price to the Holder within
five (5) business days following the Maker’s receipt of the Holder’s Election
Upon Inability to Convert (other than pursuant to a dispute as to the
determination of the arithmetic calculation of the Mandatory Prepayment Price),
in addition to any remedy the Holder may have under this Note and the Purchase
Agreement, such unpaid amount shall bear interest at the rate of two percent
(2%) per month (prorated for partial months) until paid in full. Until the full
Mandatory Prepayment Price is paid in full to the Holder, the Holder may (i)
void the Mandatory Prepayment with respect to that portion of the Note for which
the full Mandatory Prepayment Price has not been paid, (ii) receive back such
Note, and (iii) require that the Conversion Prices of such returned Note be
adjusted to the lesser of (A) the Conversion Prices as in effect on the date on
which the Holder voided the Mandatory Prepayment and (B) the lowest Closing
Price during the period beginning on the Conversion Date and ending on the date
the Holder voided the Mandatory Prepayment.

 
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(d)           Pro-rata Conversion and Prepayment.   In the event the Maker
receives a Conversion Notice from more than one holder of the Series A Notes on
the same day and the Maker can convert and prepay some, but not all, of the
Series A Notes pursuant to this Section 3.6, the Maker shall convert and prepay
from each holder of the Series A Notes electing to have its Series A Notes
converted and prepaid at such time an amount equal to such holder’s pro-rata
amount (based on the principal amount of the Series A Notes held by such holder
relative to the principal amount of the Series A Notes outstanding) of all the
Series A Notes being converted and prepaid at such time.
 
3.7           Prepayment Upon Triggering Event.
 
(a)           Prepayment Option Upon Triggering Event.  In addition to all other
rights of the Holder contained herein, after a Triggering Event (as defined
below), the Holder shall have the right, at the Holder’s option, to require the
Maker to prepay all or a portion of this Note in cash at a price equal to the
sum of  (i) one hundred percent (100%) of the aggregate principal amount of this
Note plus all accrued and unpaid interest, and (ii) all other amounts, costs,
expenses and liquidated damages due in respect of this Note and the other
Transaction Documents (the “Prepayment Price”).  If the Holder demands payment
of the Prepayment Price pursuant to this Section 3.7, the Maker shall deliver
such payment to the Holder within 5 business days after the receipt of such
demand
 
(b)           Triggering Event.  A “Triggering Event” shall be deemed to have
occurred at such time as any of the following events:
 
(i)             any Event of Default pursuant to Sections 2.1 (b), (c) or (d)
shall have occurred;
 
(ii)             the Maker’s notice to any holder of the Notes, including by way
of public announcement, at any time, of its inability to comply or its intention
not to comply with proper requests for conversion of any Notes into shares of
Common Stock; or
 
(iii)             the Maker deregisters its shares of Common Stock and as a
result such shares of Common Stock are no longer publicly traded; or
 
(iv)             the Maker consummates a “going private” transaction and as a
result the Common Stock is no longer registered under Sections 12(b) or 12(g) of
the Exchange Act.

 
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3.8           No Rights as Shareholder.   Nothing contained in this Note shall
be construed as conferring upon the Holder, prior to the conversion of this
Note, the right to vote or to receive dividends or to consent or to receive
notice as a shareholder in respect of any meeting of shareholders for the
election of directors of the Maker or of any other matter, or any other rights
as a shareholder of the Maker.
 
ARTICLE IV
 
COVENANTS

For so long as this Note is outstanding, without the prior written consent of
the holders of at least a majority of the then outstanding principal balance
hereof:

4.1           No Liens.   The Maker shall not, and shall not permit its
Subsidiaries to, enter into, create, incur, assume or suffer to exist any Liens
on or with respect to any of its assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom, other than:
 
(a)           Liens that are Permitted Encumbrances;
 
(b)           Liens for purchase money obligations, incurred in the ordinary
course of the Maker’s business, to acquire assets that do not exceed the
purchase price of the asset and that encumber only the asset being purchased;
and
 
(c)           any Lien listed on Schedule 3.12 to the Purchase Agreement.
 
4.2           No Indebtedness.   The Maker shall not, and shall not permit any
Subsidiary to, enter into, create, incur, assume or suffer to exist any
Indebtedness, other than
 
(a)           Indebtedness existing on the Issuance Date and disclosed in the
Commission Documents;
 
(b)           Indebtedness created under the Transaction Documents;
 
(c)           Non-current liabilities for post-employment healthcare and other
insurance benefits;
 
(d)           Trade payables and insurance premium financing incurred in the
ordinary course of business and consistent with past practices; and
 
(e)           Indebtedness secured by Liens permitted under Section 4.1.
 
4.3           Compliance with Transaction Documents.   The Maker shall, and
shall cause its Subsidiaries to, comply with its obligations under this Note,
the Series B Note and the other Transaction Documents.
 
4.4           Compliance with Law.   The Maker shall, and shall cause each of
its Subsidiaries to, comply with law and duly observe and conform in all
material respects to all valid requirements of Governmental Authorities relating
to the conduct of its business or to its properties or assets.

 
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4.5           Transactions with Affiliates.   The Maker shall not, and shall not
permit its Subsidiaries to, engage in any transactions with any officer,
director, employee or any Affiliate of the Maker, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Maker, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $50,000, other than (i) for payment of
reasonable salary for services actually rendered, as approved by the Board of
Directors of the Maker as fair in all respects to the Maker, and (ii)
reimbursement for expenses incurred on behalf of the Maker.
 
4.6           No Dividends.   The Maker shall not, and shall not permit any
Subsidiary to, (a) declare or pay any dividends or make any distributions to any
holder(s) of Common Stock or other equity security of the Maker or such
Subsidiaries (other than dividend and distributions from a Subsidiary to the
Maker and dividends on the Preferred Stock), (b) purchase or otherwise acquire
for value, directly or indirectly, any shares or other equity security of the
Maker, (c) form or create any subsidiary become a partner in any partnership or
joint venture, or make any acquisition of any interest in any Person or acquire
substantially all of the assets of any Person, or (d) transfer, assign, pledge,
issue or otherwise permit any equity or other ownership interests in the
Subsidiaries to be beneficially owned or held by any person other than the Maker
and, in the case of Cira Biosciences, Inc. the persons owning or holding such
securities on the Issuance Date; provided, however, that Maker’s Cira
Biosciences, Inc. subsidiary may issue equity securities in connection with
third-party arms-length capital raising transactions and pay dividends to the
holders of such equity securities in accordance with their terms.
 
4.7           No Merger or Sale of Assets.   The Maker shall not, and shall not
permit any Subsidiary to, (a) merge or consolidate or sell or dispose of all its
assets or any substantial portion thereof, or (b) in any way or manner alter its
organizational structure or effect a change of entity; provided, however, that
the Maker shall be permitted to sell or dispose of its assets (but not all or
substantially all of its assets) in the ordinary course of its business and
consistent with past practice.
 
4.8           Payment of Taxes, Etc.   The Maker shall, and shall cause each of
its Subsidiaries to, promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments and governmental
charges or levies imposed upon the income, profits, property or business of the
Maker and the Subsidiaries, except for such failures to pay that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Maker or such
Subsidiaries shall have set aside on its books adequate reserves with respect
thereto, and provided, further, that the Maker and such Subsidiaries will pay
all such taxes, assessments, charges or levies forthwith upon the commencement
of proceedings to foreclose any lien which may have attached as security
therefor.

 
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4.9           Corporate Existence.   the Maker shall, and shall cause each of
its Subsidiaries to, maintain in full force and effect its corporate existence,
rights and franchises and all licenses and other rights to use property owned or
possessed by it and reasonably deemed to be necessary to the conduct of its
business.
 
4.10         Investment Company Act.   The Maker shall conduct its businesses in
a manner so that it will not become subject to the Investment Company Act of
1940, as amended.
 
4.11         Maintenance of Assets.   The Maker shall, and shall cause its
Subsidiaries to, keep its properties in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto.
 
4.12         Indebtedness to Affiliates.   The Maker shall not, and shall not
permit any Subsidiary to, make any payment on any indebtedness owed to officers,
directors or Affiliates, except for reimbursements of reasonable and typical
business expenses.
 
4.13         Restriction on Dividends.   The Maker shall not, and shall not
permit any Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to pay dividends or distributions to the Maker, pay
any indebtedness owed to the Maker or transfer any properties or assets to the
Maker
 
4.14         No Investments.  The Maker shall not, and shall not permit any
Subsidiary to, make or suffer to exist any Investments or commitments therefor,
other than Investments made in the ordinary course of business.
 
4.15         Transfers to Subsidiaries.  The Maker shall not make any transfers
of funds or other assets to any Subsidiary except in the ordinary course of
business and consistent with past practice.
 
ARTICLE V
 
MISCELLANEOUS

5.1           Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, telecopy or facsimile at the
address or number designated in the Purchase Agreement (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The Maker will give
written notice to the Holder at least ten (10) days prior to the date on which
the Maker takes a record (x) with respect to any dividend or distribution upon
the Common Stock, (y) with respect to any pro rata subscription offer to holders
of Common Stock or (z) for determining rights to vote with respect to any
Organic Change, dissolution, liquidation or winding-up and in no event shall
such notice be provided to such holder prior to such information being made
known to the public. The Maker will also give written notice to the Holder at
least ten (10) days prior to the date on which any Organic Change, dissolution,
liquidation or winding-up will take place and in no event shall such notice be
provided to the Holder prior to such information being made known to the public.
The Maker shall promptly notify the Holder of this Note of any notices sent or
received, or any actions taken with respect to the Series A Notes.

 
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5.2           Governing Law.   This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Note shall not
be interpreted or construed with any presumption against the party causing this
Note to be drafted.
 
5.3           Headings.   Article and section headings in this Note are included
herein for purposes of convenience of reference only and shall not constitute a
part of this Note for any other purpose.
 
5.4           Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief.   The remedies provided in this Note shall be cumulative and
in addition to all other remedies available under this Note, at law or in equity
(including, without limitation, a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit a holder’s right to pursue actual damages for any failure by the
Maker to comply with the terms of this Note.  Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the holder thereof and shall
not, except as expressly provided herein, be subject to any other obligation of
the Maker (or the performance thereof).  The Maker acknowledges that a breach by
it of its obligations hereunder will cause irreparable and material harm to the
Holder and that the remedy at law for any such breach may be inadequate.
Therefore the Maker agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available rights
and remedies, at law or in equity, to seek and obtain such equitable relief,
including but not limited to an injunction restraining any such breach or
threatened breach, without the necessity of showing economic loss and without
any bond or other security being required.
 
5.5           Enforcement Expenses.   In the event of any default under this
Note, Maker agrees to pay the reasonable costs and expenses of Holder in
enforcing this Note (including reasonable attorneys’ fees and court costs),
subject, in the case of any suit, action or proceeding to enforce this Note, to
Section 5.9.
 
5.6           Binding Effect.   The obligations of the Maker and the Holder set
forth herein shall be binding upon the successors and assigns of each such
party, whether or not such successors or assigns are permitted by the terms
hereof.
 
5.7           Amendments.   This Note may not be modified or amended in any
manner except in writing executed by the Maker and the holders of a majority of
the outstanding principal balance of the Series A Notes.

 
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5.8           Compliance with Securities Laws.   The Holder of this Note
acknowledges that this Note is being acquired solely for the Holder’s own
account and not as a nominee for any other party, and for investment, and that
the Holder shall not offer, sell or otherwise dispose of this Note except in
compliance with applicable securities laws. This Note and any Note issued in
substitution or replacement therefor shall be stamped or imprinted with a legend
in substantially the following form:
 
“THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN
THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE MAY BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.”

5.9           Consent to Jurisdiction. Each of the Maker and the Holder
irrevocably agrees that the any legal action or proceeding arising out of or
relating to this Note may be brought in the Courts of New York County, New York
or of the United States of America for the Southern District of New York and
hereby expressly submits to the personal jurisdiction and venue of such courts
for the purposes thereof and expressly waives any claim of improper venue and
any claim that such courts are an inconvenient forum. Each of the Maker and the
Holder hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such suit, action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, at the address
in effect for notices to it under the Purchase Agreement, such service to become
effective 10 days after such mailing. Nothing in this Section 5.9 shall affect
or limit any right to serve process in any other manner permitted by law. Each
of the Maker and the Holder hereby agree that the prevailing party in any suit,
action or proceeding arising out of or relating to this Note shall be entitled
to reimbursement for reasonable legal fees from the non-prevailing party. The
Maker and the Holder hereby waive all rights to trial by jury.
 
5.10         Parties in Interest. This Note shall be binding upon, inure to the
benefit of and be enforceable by the Maker, the Holder and their respective
successors and permitted assigns.
 
5.11         Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

 
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5.12        Waivers; Dispute Resolution.
 
(a)        Except as otherwise specifically provided herein, the Maker and all
others that may become liable for all or any part of the obligations evidenced
by this Note, hereby waive presentment, demand, notice of nonpayment, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and do hereby consent to any number of
renewals of extensions of the time or payment hereof and agree that any such
renewals or extensions may be made without notice to any such persons and
without affecting their liability herein and do further consent to the release
of any person liable hereon, all without affecting the liability of the other
persons, firms or Maker liable for the payment of this Note. No delay or
omission on the part of the Holder in exercising its rights under this Note, or
course of conduct relating hereto, shall operate as a waiver of such rights or
any other right of the Holder, nor shall any waiver by the Holder of any such
right or rights on any one occasion be deemed a waiver of the same right or
rights on any future occasion.
 
(b)        In the case of a dispute as to the determination of the Closing Price
or the VWAP or the arithmetic calculation of the Conversion Prices, any
adjustment to the Conversion Prices, liquidated damages amount, interest or
dividend calculation, or any redemption price, redemption amount, adjusted
Conversion Prices, or similar calculation, or as to whether a subsequent
issuance of securities is prohibited hereunder or would lead to an adjustment to
the Conversion Prices, the Maker shall submit the disputed determinations or
arithmetic calculations via facsimile within two (2) Business Days of receipt,
or deemed receipt, of the Conversion Notice, any redemption notice, default
notice or other event giving rise to such dispute, as the case may be, to the
Holder. If the Holder and the Maker are unable to agree upon such determination
or calculation within two (2) Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Maker shall,
within two (2) Business Days submit via facsimile (a) the disputed determination
of the Closing Price or the VWAP to an independent, reputable investment bank
selected by the Maker and approved by the Holder, which approval shall not be
unreasonably withheld, (b) the disputed arithmetic calculation of the Conversion
Prices, adjusted Conversion Prices or any redemption price, redemption amount or
default amount to the Maker’s independent, outside accountant or (c) the
disputed facts regarding whether a subsequent issuance of securities is
prohibited hereunder or would lead to an adjustment to the Conversion Prices (or
any of the other above described facts not expressly designated to the
investment bank or accountant), to an expert attorney from a nationally
recognized outside law firm (having at least 100 attorneys and having with no
prior relationship with the Maker) selected by the Maker and approved by the
Lead Purchaser as defined in the Purchase Agreement). The Maker, at the Maker’s
expense, shall cause the investment bank, the accountant, the law firm, or other
expert, as the case may be, to perform the determinations or calculations and
notify the Maker and the Holder of the results no later than five (5) Business
Days from the time it receives the disputed determinations or calculations. Such
investment bank’s, accountant’s or attorney’s determination or calculation, as
the case may be, shall be binding upon all parties absent demonstrable error.
 
5.13        Additional Definitions. Terms used herein and not defined shall have
the meanings set forth in the Purchase Agreement.  For the purposes hereof, the
following terms shall have the following meanings:
 
“Closing Price” shall mean (i) the last trading price per share of the Common
Stock on such date on the OTC Bulletin Board or a registered national stock
exchange on which the Common Stock is then listed, or if there is no such price
on such date, then the last trading price on such exchange or quotation system
on the date nearest preceding such date, or (ii) if the price of the Common
Stock is not then reported by the OTC Bulletin Board or a registered national
securities exchange, then the average of the “Pink Sheet” quotes for the
relevant date, as reported by the National Quotation Bureau, Inc., or (iii) if
the Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by the Holder and reasonably acceptable to the Maker.

 
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“Equity Conditions” shall mean, during the period in question, (i) the Maker
shall have duly honored all conversions and redemptions scheduled to occur or
occurring by virtue of one or more Conversion Notices of the Holder, if any,
(ii) all liquidated damages and other amounts owing to the Holder in respect of
this Note shall have been paid; (iii) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus
thereunder to resell all of the shares issuable pursuant to the Transaction
Documents, whether by conversion or exercise, forced conversion, in lieu of cash
interest or otherwise (and the Maker believes, in good faith, that such
effectiveness will continue uninterrupted for the foreseeable future), (iv) the
Common Stock is trading on the Trading Market and all of the shares issuable
pursuant to the Transaction Documents are listed for trading on a Trading Market
(and the Maker believes, in good faith, that trading of the Common Stock on a
Trading Market will continue uninterrupted for the foreseeable future), (v)
there is a sufficient number of authorized but unissued and otherwise unreserved
shares of Common Stock for the issuance of all of the shares issuable pursuant
to the Transaction Documents, (vi) there is then existing no Event of Default or
event which, with the passage of time or the giving of notice, would constitute
an Event of Default, (vii) the issuance of the shares in question (including
shares of Common Stock as interest hereunder) to the Holder would not violate
the 4.99% or 9.99% beneficial ownership limitations set forth in Section 3.4
hereof, and (viii) no public announcement of a pending or proposed Triggering
Event has occurred.

“Investment” means, with respect to any Person, all investments in any other
Person, whether by way of extension of credit, loan, advance, purchase of stock
or other ownership interest (other than ownership interests in such Person),
bonds, notes, debentures or other securities, or otherwise, and whether existing
on the date of this Agreement or thereafter made, but such term shall not
include the cash surrender value of life insurance policies on the lives of
officers or employees, excluding amounts due from customers for services or
products delivered or sold in the ordinary course of business.

“Trading Day” means (a) a day on which the Common Stock is traded on the OTC
Bulletin Board, or (b) if the Common Stock is not traded on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices);  provided
,  however , that in the event that the Common Stock is not listed or quoted as
set forth in (a) or (b) hereof, then Trading Day shall mean any day except
Saturday, Sunday and any day which shall be a legal holiday or a day on which
banking institutions in the State of New York are authorized or required by law
or other government action to close.

“Trading Market” means the Over the Counter Bulletin Board, the New York Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market or the American Stock Exchange.

 
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“VWAP” means, for any date, (i) the daily volume weighted average price of the
Common Stock for such date on the OTC Bulletin Board (or national securities
exchange, if applicable) as reported by Bloomberg Financial L.P. (based on a
Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board (or national
securities exchange, if applicable) and if prices for the Common Stock are then
reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (iii) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Maker.

[Signature on following page]

 
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IN WITNESS WHEREOF, the Maker has caused this Amended and Restated Note to be
duly executed by its duly authorized officer as of July 24, 2009.
 
NEOPROBE CORPORATION
 
By: /s/ Brent L. Larson
 
Its: Vice-President, Finance & CFO

 
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EXHIBIT A

HOLDER’S ACCOUNT INSTRUCTIONS

 
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