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8-K - CURRENT REPORT - AMERICAN BIO MEDICA CORP | abmc_8k.htm |
EXHIBIT
4.27
SECURITIES PURCHASE AGREEMENT
This
Securities and Purchase
Agreement (the “Agreement”) is made and entered
into as of the later of the dates set forth on the signature pages
hereto, by and between American Bio Medica Corporation (the
“Company”) and the individual more specifically
identified on the signature page of this Agreement (the
“Purchaser”). Throughout this Agreement, the Company
and the Purchaser may be referred to individually as a
“Party” and collectively as the
“Parties”.
WHEREAS, subject to the terms and
conditions set forth in this Agreement and pursuant to Section
4(2)(a) of the Securities Act (as defined below), and Rule 506
promulgated thereunder, the Company desires to issue and sell to
the Purchaser, and the Purchaser desires to purchase from the
Company restricted shares of the Company’s common stock (the
“Securities”).
NOW, THEREFORE, in consideration of the
mutual covenants contained in this Agreement, and for other good
and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and Purchaser agree as
follows:
ARTICLE I.
DEFINITIONS
1.1
Definitions. In addition to the
terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms have the meanings indicated in this
Section 1.1:
“Accredited Investor” shall
have the meaning ascribed to such term in Rule 501(a) under the
Securities Act.
“Action” shall have the
meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any Person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule
144..
“Business Day” means any day
except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New
York are authorized or required by law or other governmental action
to close.
“Closing” means the closing
of the purchase and sale of the Common Stock pursuant to Section
2.1.
“Closing Date” means the
date of the Closing, which shall be the date hereof.
“Closing Price” means on any
particular date (a) the last reported closing sale price per share
of Common Stock on such date on the OTC Markets or (b) if there is
no such price on such date, then the closing sale price on the OTC
Market on the date nearest preceding such date for the closing
price.
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means the
common stock of the Company, $0.01 par value per share, and any
securities into which such common stock may hereafter be
reclassified.
1
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Intellectual Property
Rights” shall have the meaning ascribed to such term
in Section 3.1(o).
“Liens” means a lien,
charge, security interest, encumbrance, right of first refusal or
other restriction.
“Material Adverse Effect”
shall have the meaning ascribed to such term in Section
3.1(b).
“Material Permits” shall
have the meaning ascribed to such term in Section
3.1(m).
“Per Share Purchase Price”
equals $XXXX per share,
subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the
Common Stock that occur after the date of this
Agreement.
“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock
company, government (or an agency or subdivision thereof) or other
entity of any kind.
“Rule 144,” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.
“SEC Documents” shall mean
the SEC Reports, the press releases of the Company and registration
statements of the Company filed with the Commission pursuant to the
Securities Act (including any amendments thereto).
“SEC Reports” shall have the
meaning ascribed to such term in Section 3.1(h).
“Securities” shall have the
meaning ascribed to such term in the Preamble.
“Securities Act” means the
Securities Act of 1933, as amended.
“Shares” means the shares of
Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.
“Subscription Amount” means
the amount set forth below the Purchaser’s signature block on
the signature page hereto, in United States dollars and in
immediately available funds.
“Subsidiary” shall have the
meaning ascribed to such term in Section 3.1(a).
“Trading Day” means (i) a
day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Markets; provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i),
hereof, then Trading Day shall mean a Business Day.
“Transaction Documents”
means this Agreement any other documents or agreements executed in
connection with the transactions contemplated
hereunder.
2
ARTICLE II
PURCHASE AND SALE
2.1
Closing.
Upon the terms and subject to the conditions set forth herein, the
Company agrees to sell, and the Purchaser agrees to purchase on the
Closing Date, Common Stock for an aggregate purchase price
of $XXXXX. At the Closing, the Purchaser shall purchase,
and the Company shall issue and sell $XXXXX of Common Stock. The Purchaser shall purchase from
the Company, and the Company shall issue and sell to the Purchaser,
(a) a number of Shares equal to such Purchaser’s Subscription
Amount divided by the Per Share Purchase Price. Upon satisfaction
of the conditions set forth in Section 2.2, the Closing shall occur
electronically by exchange of documents.
2.2
Closing
Conditions.
(a)
At
the Closing the Company shall deliver or cause to be delivered to
Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a stock certificate evidencing a number of Shares equal to
Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of the
Purchaser;
(b) At
the Closing the Purchaser shall deliver or cause to be delivered to
the Company the following:
(i)
this Agreement duly executed by Purchaser;
(ii)
Purchaser’s Subscription Amount as to such Closing by wire
transfer to the account of the Company;
(iv) a duly completed and executed Accredited
Investor Questionnaire in the form of Exhibit A
hereto.
(c) All
representations and warranties of the other party contained herein
shall remain true and correct in all material respects as of the
Closing Date (other than representations and warranties made as of
a specified date, which shall remain true and correct in all
material respects as of such date).
(d) As
of the Closing Date, there shall have been no Material Adverse
Effect with respect to the Company since the date
hereof.
(e) From
the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission (except for any
suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing), and, at
any time prior to Closing Date, trading in the Common Stock shall
not have been suspended or limited, or minimum prices shall not
have been established on the Common Stock on any Trading Market,
nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have
occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of each Purchaser,
makes it impracticable or inadvisable to purchase the Shares at the
such Closing.
3
ARTICLE
III
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the
Company. The Company hereby makes the following
representations and warranties as of the date hereof to the
Purchaser:
(a)
Subsidiaries. The Company has
no direct or indirect subsidiaries.
(b)
Organization and Qualification.
The Company is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable),
with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. The Company is not in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. The Company is duly
qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, would not have
or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business or financial condition of the
Company, taken as a whole, or (iii) adversely impair the
Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “Material Adverse
Effect”).
(c)
Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company and no further action
is required by the Company in connection therewith. Each
Transaction Document has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable
remedies.
(d)
No Conflicts. The execution,
delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions
contemplated thereby do not and will not (i) conflict with or
violate any provision of the Company’s articles of
incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other
understanding to which the Company is a party or by which any
property or asset of the Company is bound or affected, or (iii)
result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected; except in
the case of each of clauses (ii) and (iii), such as would not have
or reasonably be expected to result in a Material Adverse
Effect.
(e)
Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than the filing with
the Commission of a Current Report on Form 8-K within 4 business
days of the Closing Date.
(f)
Issuance of the Securities. The
Securities are duly authorized and, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all
Liens.
(g)
Capitalization. The
capitalization of the Company is as described in the
Company’s most recent periodic report filed with the
Commission. The Company has not issued any capital stock since
January 2020.
(h)
SEC Reports; Financial
Statements. The Company has filed all reports required to be
filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) of the Exchange Act,
for the two years preceding the date hereof (or such shorter period
as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto, being
collectively referred to herein as the “SEC Reports” on
a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis during the periods covered (“GAAP”), except as
may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company as of
and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit
adjustments.
4
(i)
Material Changes. Since the
date of the latest audited financial statements included within the
SEC Reports, except as disclosed in the SEC Reports, (i) there has
been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required
to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting, and (iv) the
Company has not declared or made any dividend or distribution of
cash or other property to its shareholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its
common stock. The Company does not have pending before the
Commission any request for confidential treatment of
information.
(j)
Litigation. Except as disclosed
in the SEC Reports, there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company.
(k)
Labor Relations. No material
labor dispute exists or, to the knowledge of the Company, is
imminent with respect to any of the employees of the Company which
could reasonably be expected to result in a Material Adverse
Effect.
(l)
Compliance. Except as disclosed
in the SEC Reports, the Company (i) is not in default under or in
violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company), nor has the Company received notice of a
claim that it is in default under or that it is in violation of,
any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state
and local laws applicable to its business, except in the case of
clauses (i), (ii) and (iii) as would not have or reasonably be
expected to result in a Material Adverse Effect.
(m)
Regulatory Permits. The Company
possesses all certificates, authorizations and permits issued by
the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess
such permits would not have or reasonably be expected to result in
a Material Adverse Effect (“Material Permits”), and the
Company has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(n)
Title to Assets. The Company
has good and marketable title in fee simple to all real property
owned by them that is material to the business of the Company and
good and marketable title in all personal property owned by them
that is material to the business of the Company, in each case free
and clear of all Liens, except for Liens that do not materially
affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the
Company and Liens for the payment of federal, state or other taxes,
the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the
Company are held by them under valid, subsisting and enforceable
leases of which the Company is in compliance.
(o)
Patents and Trademarks. To the
knowledge of the Company (without having conducted a patent
search), the Company has, or has rights to use, all patents, patent
applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with their respective
businesses as described in the SEC Reports and which the failure to
so have could have or reasonably be expected to result in a
Material Adverse Effect (collectively, the “Intellectual
Property Rights”). The Company has not received a written
notice that the Intellectual Property Rights used by the Company
violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are
enforceable.
(p)
Insurance. The Company is
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company is engaged. The
Company has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant increase
in cost.
5
(q)
Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of
the Company, none of the employees of the Company is presently a
party to any transaction with the Company (other than for services
as employees, officers and directors), 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
Company, 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 $60,000 other than
(a) for payment of salary or consulting fees for services rendered,
(b) reimbursement for expenses incurred on behalf of the Company
and (c) for other employee benefits, including stock option
agreements under any stock option plan of the Company.
(r)
Internal Accounting Controls.
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the
Company is made known to the certifying officers by others within
the Company, particularly during the period in which the
Company’s Form 10-K or 10-Q, as the case may be, is being
prepared. The Company’s certifying officer has evaluated the
effectiveness of the Company’s controls and procedures as of
a date within 90 days prior to the filing date of the Form 10-Q for
the quarter ended September 30, 2019 (such date, the
“Evaluation Date”). The Company presented in its most
recently filed Form 10-K or Form 10-Q the conclusions of the
certifying officer about the effectiveness of the disclosure
controls and procedures based on evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act)
or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal
controls.
(s)
Certain Fees. No brokerage or
finder’s fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by this Agreement. The
Purchaser shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due under
any agreement or arrangement entered into by the Company in
connection with the transactions contemplated by this
Agreement.
(t)
Private Placement. Assuming the
accuracy of the Purchaser’s representations and warranties
set forth in Section 3.2, no registration under the Securities Act
is required for the offer and sale of the Securities by the Company
to the Purchasers as contemplated hereby.
(u)
Investment Company. The Company
is not, and is not an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of
1940, as amended.
(v)
Listing and Maintenance
Requirements. The Company has not, in the 12 months
preceding the date hereof, received notice from the OTC Marketplace
on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of the OTC Marketplace. The Company is,
and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements.
(w)
No Integrated Offering. Neither
the Company, nor any of its affiliates, nor, to the Company’s
knowledge, any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with
prior offerings by the Company in a manner that violates Section 5
of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or
designated.
3.2
Representations and Warranties of the
Purchasers. The
Purchaser represents and warrants as of the date hereof and as of
the Closing Date to the Company as follows:
(a)
Authority; Conflicts. The
Purchaser has full rights, power and authority to enter into and to
consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations thereunder.
Each Transaction Document to which it is party has been duly
executed by the Purchaser, and when delivered by the Purchaser in
accordance with terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms. The execution, delivery and performance
by the Purchaser of this Purchase Agreement and compliance herewith
and therewith will not result in any violation of and will not
conflict with, or result in a breach of any of the terms of, or
constitute a default under, any provision of any mortgage,
indenture, agreement, instrument, judgment, decree, order, law,
rule or regulation or other restriction to which Purchaser is a
party or by which it is bound, which violation, conflict, breach or
default would have a material adverse effect upon the
Purchaser’s status as an Accredited Investor, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Purchaser.
6
(b)
Investment Intent. The
Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the
Securities as principal for its own account for investment purposes
only and not with a view to or for distributing or reselling such
Securities or any part thereof, has no present intention of
distributing any of such Securities and has no arrangement or
understanding with any other persons regarding the distribution of
such Securities (this representation and warranty not limiting such
Purchaser’s right to sell the Securities otherwise in
compliance with applicable federal and state securities laws). The
Purchaser is acquiring the Securities hereunder in the ordinary
course of its business. The Purchaser does not have any agreement
or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(c)
Purchaser Status. At the time
the Purchaser was offered the Securities, it was, and at the date
hereof it is an “Accredited Investor. The Purchaser is not
required to be registered as a broker-dealer under Section 15 of
the Exchange Act.
(d)
Experience of Purchaser. The
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. The Purchaser is
able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such
investment. The Purchaser had access to the SEC Documents and has
carefully reviewed the information contained therein, including,
but not limited to, the section entitled “Risk Factors”
in the Company’s Form 10-K for the year ended December 31,
2018 and any subsequent updates to its risk factors in subsequent
Form 10-Qs and/or 8-Ks. The Purchaser is aware of the
Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the
Securities.
(e)
General Solicitation. The
Purchaser is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or
any other general solicitation or general
advertisement.
(f)
Reliance by Company. The
Purchaser understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration
and qualification requirements of United States federal and state
securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser’s compliance with the
representations, warranties, agreements, acknowledgments and
understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility
of the Purchaser to acquire the Securities.
(g)
No Legal, Tax or Investment
Advice. The Purchaser understands that nothing in the
Purchase Agreement or any other materials presented to the
Purchaser in connection with the purchase and sale of the
Securities constitutes legal, tax or investment advice. The
Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Securities.
(h)
Risk and Suitability. The
Purchaser acknowledges and realizes that Purchaser’s purchase
of the Securities involves a high degree of risk and the Purchaser
could lose a substantial portion or all of its investment in the
Securities. In addition, the Purchaser has such knowledge and
experience in business and financial matters, including without
limitation, investment in technology and biotechnology companies,
as will enable the Purchaser to fend for itself, bear the economic
risk of its investment and evaluate the merits and risks of an
investment in the Securities and to make an informed investment
decision. The Purchaser understands that the Company anticipates,
based on currently proposed plans and assumptions relating to its
operations, that the proceeds of this Offering will provide
sufficient working capital to meet the Company’s needs in the
near term. In the event that the Company’s plans change or
its assumptions change or prove to be inaccurate, the Company would
be required to seek additional financing sooner than anticipated.
There can be no assurance that the Company will achieve cash flow
from operations sufficient to satisfy its working capital
requirements, or at all, or that additional financing will be
available to the Company on commercially reasonable terms, or at
all.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(a)
The Securities may
only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement, to the Company, to
an Affiliate of the Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer,
any transferee shall agree in writing to be bound by the terms of
this Agreement and upon such agreement shall have the rights of
Purchaser under this Agreement.
7
(b)
The Purchaser
agrees to the imprinting, so long as is required by this Section
4.1(b), of a legend (in addition to any other legends required
under applicable securities laws) on any of the Securities in the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS REGISTERED UNDER THE SECURITIES ACT OR UNLESS SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED. THESE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER
THE SECURITIES ACT.
The
Company acknowledges and agrees that the Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or
all of the Securities to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under
the Securities Act and, if required under the terms of such
arrangement, the Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or
transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or
transfer of the Securities, including the preparation and filing of
any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act
to appropriately amend the list of Selling Stockholders
thereunder.
(c)
Certificates
evidencing the Shares shall not contain any legend (including the
legend set forth in Section 4.1(b)), (i) following any sale of such
Shares pursuant to Rule 144, or (ii) if such Shares are eligible
for sale under Rule 144(k), or (iii) if such legend is not required
under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the Staff of
the Commission). The Company agrees that at such time as such
legend is no longer required under this Section 4.1(c), it will, no
later than five Trading Days following the delivery by Purchaser to
the Company or the Company’s transfer agent of a certificate
representing Shares, as the case may be, issued with a restrictive
legend (such date, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate
representing such Securities that is free from all restrictive and
other legends. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company that
enlarge the restrictions on transfer set forth in this
Section.
4.2
Furnishing of Information. As
long as the Purchaser owns Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange
Act. Upon the request of any such holder of Securities, the Company
shall deliver to such holder a written certification of a duly
authorized officer as to whether it has complied with the preceding
sentence. As long as Purchaser owns Securities, if the Company is
not required to file reports pursuant to such laws, it will prepare
and furnish to Purchaser and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchaser
to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from
time to time to enable such Person to sell such Securities without
registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.
4.3
Integration. The Company shall
not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that, to the Company’s knowledge, would
be integrated with the offer or sale of the Securities in a manner
that would require the registration under Section 5 of the
Securities Act of the sale of the Securities to the
Purchasers.
4.4
Securities Laws Disclosure;
Publicity. The Company shall, within 4 Business Days of the
Closing Date, file a Current Report on Form 8-K that is reasonably
acceptable to each Purchaser, disclosing the transactions
contemplated hereby and make such other filings and notices in the
manner and time required by the Commission. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of the
Purchaser, or include the name of the Purchaser in any filing with
the Commission or any regulatory agency, without the prior written
consent of Purchaser, except (i) as required by federal securities
law in connection with the registration statement contemplated by
the Registration Rights Agreement and (ii) to the extent such
disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchaser with prior
notice of such disclosure permitted under subclause (i) or
(ii).
4.6
Shareholders Rights Plan. No
claim with respect to the securities being acquired by the
Purchaser under this Agreement will be made or enforced by the
Company that Purchaser is an “Acquiring Person” under
any shareholders rights plan or similar plan or arrangement in
effect or hereafter adopted by the Company, or that Purchaser could
be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the
Company and the Purchaser. The foregoing covenant shall apply only
to those securities acquired by Purchaser or its affiliates under
this Agreement, and not to any securities of the Company held or
subsequently acquired by Purchaser or any affiliate
thereof.
4.7
Non-Public Information. The
Company covenants and agrees that neither it nor any other Person
acting on its behalf will provide Purchaser or its agents or
counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. The Company
understands and confirms that the Purchaser shall be relying on the
foregoing representations in effecting transactions in securities
of the Company.
8
4.8
Use of Proceeds. The Company
shall use proceeds from the sale of the Securities hereunder for
working capital and general corporate purposes.
4.9
Reservation of Common Stock. As
of the date hereof, the Company has reserved a sufficient number of
shares of Common Stock for the purpose of enabling the Company to
issue Shares pursuant to this Agreement.
ARTICLE V
MISCELLANEOUS
5.1
Fees and Expenses. Except as
otherwise set forth in this Agreement, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and
similar taxes and duties levied in connection with the sale of the
Securities from the Company to the Purchaser.
5.2
Entire Agreement. The
Transaction Documents, together with any exhibits and schedules
thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.
5.3
Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the
facsimile number specified on the signature pages attached hereto
prior to 5:00 p.m. (ET) on a Trading Day, (b) the next Trading Day
after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the
signature pages attached hereto on a day that is not a Trading Day
or later than 5:00 p.m. (ET) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto.
5.4
Amendments; Waivers. The terms
of the Purchase Agreement may not be waived or amended without
written agreement by the Parties. No waiver of any default with
respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any
manner impair the exercise of any such right.
5.5
Construction. The headings
herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the
provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
5.6
Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Company may
not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser. Purchaser may
assign any or all of its rights under this Agreement to any Person
to whom Purchaser assigns or transfers any Securities, provided
such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the
“Purchaser”.
5.7
No Third-Party Beneficiaries.
This Agreement is intended for the benefit of the Parties hereto
and their respective successors and permitted assigns and is not
for the benefit of, nor may any provision hereof be enforced by,
any other Person.
5.8
Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the laws of the State
of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning
the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts
sitting in the City of Albany in the State of New York. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of Albany, State
of New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any
of the Transaction Documents), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party
hereto hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via overnight delivery (with
evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each
party hereto (including its affiliates, agents, officers, directors
and employees) hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or
proceeding.
9
5.9
Survival. The representations
and warranties contained in Section 3.1 and 3.2 shall survive the
Closing and the delivery and exercise of the Securities, as
applicable for a period of one (1) year. The agreements and
covenants contained herein and in the Transaction Documents shall
survive the Closing, as to each Purchaser, until such Purchaser no
longer holds any Securities.
5.10
Execution. This Agreement may
be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party
and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile or other electronic (such as
email) transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
facsimile or electronic signature page were an original
thereof.
5.11
Severability. If any provision
of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and
provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision
in this Agreement.
5.12
Replacement of Securities. If
any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.
The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities,
including but not limited to, the costs of any security bonds any
transfer agent fees.
5.13
Remedies. In addition to being
entitled to exercise all rights provided herein or granted by law,
including recovery of damages, each of the Purchasers and the
Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.
5.14
Payment Set Aside. To the
extent that the Company makes a payment or payments to the
Purchaser pursuant to any Transaction Document or Purchaser
enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect (to the extent that they have not been
found invalid due to the Purchaser’s breach of the
Transaction Documents) as if such payment had not been made or such
enforcement or setoff had not occurred.
(Signature
pages follow)
10
IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date(s) indicated
below.
AMERICAN BIO MEDICA
CORPORATION
|
Address for
Notice:
Attention:
Chief Executive Officer
122
Smith Road
Kinderhook, New
York 12106
Telephone:
518-758-8158
Facsimile:
517-758-8171
Email:
mdwaterhouse@abmc.com
|
By:
_____________________________
|
|
Melissa A.
Waterhouse
|
|
|
|
Its:
Chief
Executive Officer/Director
|
|
|
|
Date: _____________________________
|
|
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
(SIGNATURE
PAGES FOR PURCHASERS FOLLOW)
11
PURCHASER’S
SIGNATURE PAGE
INVESTOR
|
Address for
Notice:
|
|
|
By:
_____________________________
|
_____________________________
|
|
|
Print Name:
_____________________________
|
_____________________________
|
|
|
Date:
_____________________________
|
Telephone:
_____________________________
|
|
|
|
Facsimile:
_____________________________
|
|
|
|
Email:
_____________________________
|
Subscription
Amount:
XXXXXX
|
|
Shares:
XXXXXX
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
12
EXHIBIT A
ACCREDITED INVESTOR QUESTIONNAIRE
The
purpose of this Questionnaire is to determine whether you meet the
standards for participation in a nonpublic offering under Section
4(2) of the Securities Act of 1933, as amended ("Act"), and under
the laws of the various States.
All
information contained in this Investor Questionnaire will be
treated confidentially. However, you agree that the Company may
present this questionnaire to parties deemed appropriate if called
on to establish that the proposed offer and sale of the Shares is
exempt from registration and/or qualification under the Securities
Act of 1933, as amended (the “Act”), or any other state
securities laws (collectively, “Blue Sky
Laws”).
1.
“Accredited
Investor” Conditions
I
certify that I meet one of the “Accredited Investor”
conditions (as described in Rule 501 under the Securities Act) set
forth below by checking the applicable box below:
☐
A natural person
whose individual net worth, or joint net worth with his or her
spouse, at the time of his or her purchase exceeds $1,000,000 (For
this purpose, “net worth” means the excess of total
assets at fair market value, (including principal residence, home
furnishing, and automobiles) over total liabilities.);
☐
A natural person
who had individual income in excess of $200,000, or joint income
with his or her spouse in excess of $300,000, in each of the two
most recent years and has a reasonable expectation of reaching the
same income level in the current year;
☐
A director or
executive officer of American Bio Medica Corporation
Please
indicate the State in which the person is registered to vote.
_____________________________
Please
indicate the State in which the person holds a valid Driver's
License. _____________________________
Please
indicate the State of residence that the person identifies on their
personal income tax return _____________________________
2.
Name
and Address:
Name:
|
_____________________________
|
Residence
Address:
|
_____________________________
|
|
_____________________________
|
Country of
Residence: _____________________________
|
Personal Email:
_____________________________
|
|
|
Residence Telephone
#: _____________________________
|
Cellular Telephone
#: _____________________________
|
|
|
Employer:
_____________________________
|
Job Title:
_____________________________
|
|
|
Business Address:
_____________________________
|
|
|
|
_____________________________
|
|
|
|
Business
Telephone #: _____________________________
|
Work Email:
_____________________________
|
|
|
Year
of Birth: _____________________________
|
|
|
|
Last
four digits of the Investor’s Social Security Number:
_____________________________
|
|
13
3.
Financial
Information:
(a)
2018 expected
income (check appropriate box)
☐
Less than
$100,000
☐
$100,000-$200,000
☐
$200,000-$300,000
☐
More than
$300,000
(b)
2017 income (check
appropriate box)
☐
Less than
$100,000
☐
$100,000-$200,000
☐
$200,000-$300,000
☐
More than
$300,000
(c)
2016 income (check
appropriate box)
☐
Less than
$100,000
☐
$100,000-$200,000
☐
$200,000-$300,000
☐
More than
$300,000
(d)
Over the next five
years, current level of income is expected to:
☐
Increase
☐
Decrease
☐
Remain the
same
4.
Representations
& Warranties.
I
understand that the Company will be relying on the accuracy and
completeness of the responses to the foregoing questions and I
represent and warrant to the Officers of the Company as
follows:
(i) The
answers to the above questions are complete and correct and may be
relied on by the Company in determining whether the offer of the
Shares in connection with which I have executed this questionnaire
are exempt from registration and/or qualification under the
Securities Act of 1933, as amended and applicable state securities
laws.
Date: _____________________________
|
By: _____________________________
|
|
|
Printed Name:
_____________________________
|
|
Please email the completed questionnaire to mdwaterhouse@abmc.com
14