UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 25, 2012

 

  AMERICAN BIO MEDICA CORPORATION  

(Exact name of registrant as specified in its charter)

 

New York   0-28666   14-1702188
(State or other jurisdiction of   (Commission File Number)   (IRS Employer Identification
incorporation)       Number)

 

122 Smith Road, Kinderhook, NY         12106

(Address of principal executive offices)          (Zip Code)

 

Registrant’s telephone number, including area code: 518-758-8158

 

Not applicable  

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement

 

Placement Agent Agreement

 

On July 25, 2012, American Bio Medica Corporation (the “Company”) entered into a Placement Agent Agreement (the “Agreement”) with Cantone Research, Inc. (“CRI”). Under the terms of the Agreement, CRI will act as the Company’s exclusive placement agent in connection with the proposed amendment of the Company’s existing $750,000 10% Subordinated Convertible Debentures due August 1, 2012, Series A (the “Series A Debentures”).

 

Under the proposed amendment, the Series A Debentures would be amended to reflect an extended due date of August 1, 2013 and the interest rate during the extension period would be increased from 10% to 15% per annum, due quarterly in arrears.

 

As compensation for their placement agent services, CRI will receive a cash fee of 5% of the gross amount of existing Series A Debentures, or $37,500, and the current warrants issued to CRI (in connection with their services as placement agent in the original Series A Debenture financing) will be amended to reflect a purchase price of $0.17 per share and a new term of three (3) years. CRI will also receive 1% of the gross amount of Series A Debentures, or $7,500, as a non-accountable expense allowance and ABMC will reimburse CRI $5,000 in legal fees incurred in connection with the amendment of the Series A Debentures.

 

Other terms and conditions can be reviewed in Exhibit 4.19 to this Current Report on Form 8-K.

 

Bridge Loan Agreement and Note

 

On July 30, 2012, the Company entered into a Bridge Loan Agreement and Note (the “Bridge Loan”) with Cantone Asset Management, LLC (“CAM”). The Bridge Loan will be in the amount of $150,000 and will used to cover any amounts due to Holders of the Series A Debentures that do not wish to amend the Series A Debentures with any remaining amount to be used for working capital purposes (such working capital purposes will include but not necessarily be limited to, paying the placement agent fees and expenses previously indicated under the Agreement

 

The maturity date of the Bridge Loan is August 1, 2013 and it bears simple interest in advance of 15%. In addition to the interest, on August 1, 2012, the Company will issue CAM restricted stock of the Company equal to 10% of the gross amount of existing Series A Debentures, or $15,000 using a value of $0.17 per common share; resulting in the issuance of 88,235 restricted common shares.

 

Other terms and conditions can be reviewed in Exhibits 4.20 and 4.21 to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

4.19 Placement Agent Agreement by and between the Company and Cantone Research, Inc.

 

4.20 Bridge Loan Agreement by and between the Company and Cantone Asset Management, LLC

 

4.21 Note (Bridge Loan) by and between the Company and Cantone Asset Management, LLC

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  AMERICAN BIO MEDICA CORPORATION (Registrant)
   
Dated: July 31, 2012 By: /s/ Melissa A. Waterhouse  
    Melissa A. Waterhouse  
    EVP, Regulatory Affairs  
    Chief Compliance Officer  
    Corporate Secretary  

 

 

 

EXHIBIT 4.19

 

PLACEMENT AGENT AGREEMENT

 

July 25, 2012

 

AMERICAN BIO MEDICA CORPORATION

122 Smith Road

Kinderhook, New York 12106

 

RE: Placement Agent Agreement for Extension of Existing 10% Subordinated Convertible Debentures

 

Dear Mr. Cipkowski:

 

This letter confirms our agreement that American Bio Medica Corporation, a New York corporation (“ABMC ” or the "Company”) has engaged Cantone Research, Inc. (“CRI” or the “Placement Agent”) to act as the Company’s exclusive Placement Agent in connection with the proposed amendment (the “Offering”) of the Company’s existing $750,000 10% Subordinated Convertible Debentures due August 1, 2012, Series A to 15% Subordinated Convertible Debentures due August 1, 2013, Series A (the “Debentures”, and, together with the Company’s common stock into which the Debentures are convertible, the “Securities”), pursuant to the Company’s private offering memorandum dated July 20, 2012 (the “Memorandum”). The terms of the Offering and the proposed uses of the gross proceeds of such Offering are summarized in Exhibit A to this Placement Agent Agreement (the “Agreement”). The Offering will be made solely to “accredited investors” (the “Accredited Investors”), as such term is defined in Rule 501(a) of Regulation D (“Regulation D”) promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”), pursuant to an exemption from registration under applicable federal and state securities laws available under Rule 506 of Regulation D and in accordance with the terms of this Agreement. The gross proceeds of the Offering will be on a best efforts basis (no minimum) up to an aggregate of $750,000. Any term capitalized in this Agreement, but not defined herein, shall have the same meaning as defined in the Memorandum.

 

Upon acceptance, (indicated by your signature below), this Agreement will confirm the terms of the engagement between the Placement Agent and the Company.

 

1.           Appointment.

 

(a)          On the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions of this Agreement, the Company hereby retains the Placement Agent, and the Placement Agent hereby agrees to act, as the Company’s exclusive Placement Agent in connection with the Offering. As Placement Agent for the Offering, CRI will advise and assist the Company in identifying and assisting the Company in issuing the Securities to the holders of existing debentures (the “Holders”) Holders in the Offering under the terms and conditions described in the Memorandum. The Company acknowledges and agrees that the Placement Agent is only required to use its “commercially reasonable best efforts” in connection with the Offering and that this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities or introduce the Company to Holders. CRI will, in its sole discretion, determine the reasonableness of its efforts, and is under no obligation to perform at any level other than what it deems reasonable. The Company retains the right to determine all of the terms and conditions of the Offering.

 

(b)          During the Term of this Agreement (as such term is defined below), neither the Company nor any of its subsidiaries will, directly or indirectly, solicit or otherwise encourage the submission of any proposal or offer (“Investment Proposal”) from any person or entity relating to any issuance of the Company’s or any of its subsidiaries’ securities (including debt securities) or participate in any discussions regarding an Investment Proposal. The Company will immediately cease all contacts, discussions and negotiations with third parties regarding any Investment Proposal.

 

 
 

 

2.           Information.

 

(a)          The Company recognizes that, in completing its engagement hereunder, the Placement Agent will be using and relying on the Memorandum, publicly available information and on data, material and other information furnished to Placement Agent by the Company or the Company’s affiliates and agents. The Company will cooperate with CRI and furnish, and cause to be furnished, to CRI, any and all information and data concerning the Company, its subsidiaries and the Offering that CRI deems appropriate, including, without limitation, the Company’s acquisition and/or merger plans and plans for raising capital or additional financing that is reasonably requested by CRI (the “Information”), including subscription agreements, and the forms of the Debentures (together with the Memorandum, the “Private Placement Materials”). Any Information and Private Placement Materials forwarded to Holders will be in form reasonably acceptable to Placement Agent and its counsel. The Company represents and warrants that all Information and Private Placement Materials, including, but not limited to, the Company’s financial statements and all information incorporated by reference therein, will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.

 

(b)          It is further agreed that CRI will conduct a due diligence investigation of the Company and the Company will reasonably cooperate with such investigation as a condition of CRI’s obligations hereunder. The Company recognizes and confirms that the Placement Agent: (i) will use and rely primarily on the Information, the Private Placement Materials and information available from generally recognized public sources in performing the services contemplated by this letter without having independently verified the same; (ii) is authorized as the Placement Agent to transmit to any prospective investors a copy or copies of the Private Placement Materials and any other legal documentation supplied to the Placement Agent for transmission to any prospective investors by or on behalf of the Company or by any of the Company’s officers, representatives or agents, in connection with the performance of the Placement Agent’s services hereunder or any transaction contemplated hereby; (iii) does not assume responsibility for the accuracy or completeness of the Information or the Private Placement Materials and such other information, if any provided to the Holders; (iv) will not make an appraisal of any assets of the Company or the Company generally; and (v) retains the right to continue to perform due diligence of the Company, its business and its officers and directors during the course of the engagement.

 

(c)          Until the date that is one year from the date hereof, CRI will keep all information obtained from the Company confidential except: (i) Information which is otherwise publicly available, or previously known to or obtained by, CRI independently of the Company and without breach of any of CRI’s agreements with the Company; (ii) CRI may disclose such information to its officers, directors, employees, agents, representatives, attorneys, and to its other advisors and financial sources on a need to know basis only and will ensure that all such persons will keep such information strictly confidential. No such obligation of confidentiality shall apply to information that: (i) is in the public domain as of the date hereof or hereafter enters the public domain without a breach by CRI, (ii) was known or became known by CRI prior to the Company’s disclosure thereof to CRI, (iii) becomes known to CRI from a source other than the Company, and other than by the breach of an obligation of confidentiality owed to the Company, (iv) is disclosed by the Company to a third party without restrictions on its disclosure, (v) is independently developed by CRI or (vi) is required to be disclosed by CRI or its officers, directors, employees, agents, attorneys and to its other advisors and financial sources, pursuant to any order of a court of competent jurisdiction or other governmental body or as may otherwise be required by law.

 

 
 

 

(d)          The Company recognizes that in order for CRI to perform properly its obligations in a professional manner, the Company will keep CRI informed of and, to the extent practicable and as allowed by law, permit CRI to participate in meetings and discussions between the Company and any third party relating to the matters covered by the terms of CRI’s engagement. If at any time during the course of CRI’s engagement, the Company becomes aware of any material change in any of the information previously furnished to CRI, it will promptly advise CRI of the change.

 

(e)          The Offering shall be conditioned upon, among other things, the satisfactory completion by CRI of its due diligence investigation and analysis of: (A) the Company’s arrangements with its officers, directors, employees, affiliates, customers and suppliers, and (B) the audited and unaudited historical financial statements of the Company.

 

3.           Compensation. As compensation for services rendered and to be rendered hereunder by Placement Agent, the Company agrees to pay Placement Agent the following fees in consideration of the services rendered by the Placement Agent in connection with the Offering:

 

(a)          The Company agrees to pay CRI a cash fee payable upon each closing of the transaction contemplated by this Agreement (“Closing”) equal to five percent (5%) of the gross amount of existing debentures converted into the Debentures, the fees received by CRI are referred herein as the “Placement Fee”.

 

(b)          The Company agrees to issue to CRI (or its designated affiliates or assignees), warrants to purchase 75,000 shares of common stock of the Company exercisable for three years at an exercise price of $0.17 per share.

 

(c)          The Company agrees to pay CRI a non-accountable expense allowance in cash (the “Non-Accountable Fee”) equal to 1% of the gross amount of Replacement Debentures.

 

(d)          In the event this Agreement is not completed within the term set forth in Section 4, CRI will be entitled to reimbursement of its out-of-pocket accountable expenses actually incurred in connection with this Offering.

 

(e)          CRI shall assist and cooperate with legal counsel to the Company in effecting a filing of a Registration Statement with the Securities and Exchange Commission with respect to the public offering of the shares of Company common stock into which the Debentures are convertible filed in connection with the Offering (the “SEC Filing”). The Company will be responsible for the reasonable costs and expenses of CRI in connection with the SEC Filing.

 

(f)          The Company will assist and cooperate with legal counsel to CRI in the filing with the Financial Industry Regulatory Authority (“FINRA”) Corporate Financing Department pursuant to FINRA Rule 2710(b)(10)(A)(i) (the “Issuer Filing”) and the Company shall pay the filing fee required by such Issuer Filing and the agreed fees of counsel to CRI in connection with the Issuer Filing and clearing such filing with FINRA. The Company shall assist legal counsel to CRI in pursuing the Issuer Filing until FINRA issues a letter confirming that it does not object to the terms of the Offering contemplated by such Registration Statement.

 

4.           Term of Engagement.

 

(a)          This Agreement will remain in effect until August 31, 2012 after which either party shall have the right to terminate it on fifteen (15) days prior written notice to the other. The date of termination of this Agreement is referred to in this Agreement from time to time as the “Termination Date.” The period of time during which this Agreement remains in effect is referred to herein from time to time as the “Term.” In the event, however in the course of CRI’s performance of due diligence it deems it necessary to terminate the engagement, CRI may do so prior to the Termination Date and upon immediate written notice.

 

 
 

 

(b)          Notwithstanding anything herein to the contrary, the obligation to pay the compensation and expenses described in Section 3, this Section 4, Sections 7 and 9-18 and all of Exhibit A, will survive any termination or expiration of this Agreement. The termination of this Agreement shall not affect the Company’s obligation to pay fees to the extent provided for in Section 3 above and shall not affect the Company’s obligation to reimburse the expenses accruing prior to such termination to the extent provided for in this Agreement. All such fees and reimbursements due shall be paid to the Placement Agent on or before the Termination Date (in the event such fees and reimbursements are earned or owed as of the Termination Date) or upon the closing of the Offering or any applicable portion thereof (in the event such fees are due pursuant to the terms of Section 3 hereof).

 

(c)          Notwithstanding anything herein to the contrary, the Company agrees to accept any current Holder who is an Accredited Investor and who signs and tenders the necessary transaction documents to CRI and to pay CRI all compensation required under Section 3, above upon CRI tendering such transaction documents to the Company.

 

5.          Certain Placement Procedures. The Company and the Placement Agent each represents to the other that it has not taken, and the Company and the Placement Agent each agrees with the other that it will not take any action, directly or indirectly, so as to cause the Offering to fail to be entitled to rely upon the exemption from registration afforded by Section 4(2) of the Securities Act and Regulation D. In effecting the Offering, the Company and the Placement Agent each agrees to comply in all material respects with applicable provisions of the Securities Act and any regulations thereunder and any applicable state laws and requirements. In order to induce CRI to enter into this Agreement, the Company agrees that CRI may rely upon any representations and warranties made to any Offeree in this Offering (as if fully set forth herein) for its benefit, and that all such representations and warranties shall be true and correct in all material respects, and shall be true and correct in all material respects as of the date of each Closing. The Company agrees that it shall cause any opinion of its counsel delivered to any Holders in the Offering also to be addressed and delivered to the Placement Agent, or to cause such counsel to deliver to the Placement Agent a letter authorizing it to rely upon such opinion.

 

6.           Representations, Warranties and Covenants of CRI.

 

CRI, (the “Placement Agent) hereby represent and warrant to, and covenant with, the Company that:

 

(a)          The Securities offered and sold by the Placement Agent have been and will be offered and sold in compliance with all federal and state securities laws and regulations governing the registration and conduct of broker-dealers, and the Placement Agent making the offer or sale of Securities was or will be, at the time of any such offer or sale, registered as a broker-dealer pursuant to Section 15(b) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and under the laws of each applicable state of the United States (unless exempted from the respective state’s broker-dealer registration requirements), and in good standing with FINRA;

 

(b)          The Securities offered and sold by the Placement Agent have been and will be offered and sold only to Accredited Investors in accordance with Rule 506 of Regulation D and applicable state securities laws; provided, however, the Company shall make all necessary filings under Rule 503 of Regulation D and such similar notice filings under applicable state securities laws. The Placement Agent represents and warrants that they have reasonable grounds to believe and do believe that each person to whom a sale, offer or solicitation of an offer to purchase Securities was or will be made was and is an Accredited Investor. Prior to the sale and delivery of a Company security to any such investor, the Placement Agent will obtain an executed subscription agreement and an executed investors’ rights agreement in the form agreed upon by the Company and the Placement Agent (the “Subscription Documents”).

 

 
 

 

(c)          (i) Sales of the Securities by the Placement Agent will be made only in such jurisdictions in which: (A) the Placement Agent is a registered broker-dealer; and (B) the Placement Agent has been advised by counsel that the offering and sale of the Securities is registered under, or is exempt from registration under, applicable laws. (ii) offers and sales of the Securities by the Placement Agent will be made in compliance with the provisions of Regulation D and/or Section 4(2) of the Securities Act, and the Placement Agent shall furnish to each Offeree a copy of the Memorandum (including all Schedules and Exhibits thereto) prior to accepting any subscriptions for Securities.

 

(d)          In connection with the offers and sales of the Securities, the Placement Agent has not and will not:

 

i.            Offer or sell, or solicit any offer to buy, any Securities by any form of “general solicitation” or “general advertising”, as such terms are used in Regulation D, or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act;

 

ii.          Use any written material other than the Memorandum, a copy of which is attached hereto as Exhibit C , and the Subscription Documents, and shall only rely upon and communicate information that is publicly available regarding the Company to any potential investors (without limiting the foregoing, the Placement Agent is not authorized to make any representation or warranty to any Offeree concerning the Company or an investment in the Securities); or

 

iii.         Take any action that would constitute a violation of Regulation M under the Exchange Act.

 

The Placement Agent will periodically notify the Company of the jurisdictions in which it intends the Securities to be offered by it or will be offered by it pursuant to this Agreement, and will periodically notify the Company of the status of the Offering conducted pursuant to this Agreement.

 

7.           Indemnification. The Company agrees to indemnify the Placement Agent in accordance with the indemnification and other provisions attached to the Agreement as Exhibit B (the “Indemnification Provisions”), which provisions are incorporated herein by reference and shall survive the termination or expiration of the Agreement.

 

8.          Other Activities. The Company acknowledges that CRI has been, and may in the future be, engaged to provide services as an underwriter, placement agent, finder, advisor and investment banker to other companies in the industry in which the Company is involved. Subject to the confidentiality provisions of CRI contained in Section 2 hereof, the Company acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right of CRI or of any member, manager, officer, employee, agent or representative of CRI, to be a member, manager, partner, officer, director, employee, agent or representative of, investor in, or to engage in, any other business, whether or not of a similar nature to the Company’s business, nor to limit or restrict the right of CRI to render services of any kind to any other corporation, firm, individual or association; provided that CRI and any of its member, manager, officer, employee, agent or representative shall not use the Information to the detriment of the Company. CRI may, but shall not be required to, present opportunities to the Company.

 

9.          Future Rights. Upon the successful completion of any amount of the Offering, for a period of twelve (12) months from the final closing the Offering, the Company grants CRI the right of first refusal to act as lead underwriter or placement agent for any and all future public and private equity and debt offerings during such twelve (12) month period of the Company, or any successor to or any subsidiary of the Company. Any economics in connection with a Financing that will be split with any additional agent(s) or underwriter(s) will be determined solely by CRI.

 

 
 

 

10.         Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be governed as to validity, interpretation, construction, effect and in all other respects by the internal law of the State of New York. The Company and CRI each (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the New York State Supreme Court, County of Albany, or in the United States District Court for the Northern District of New York sitting in the city of Albany, New York, (ii) waives any objection to the venue of any such suit, action or proceeding, and the right to assert that such forum is an inconvenient forum, and (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of Albany, and the United States District Court for the Northern District of New York in any such suit, action or proceeding. Each of the Company and CRI further agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in the New York State Supreme Court, County of Albany, or in the United States District Court for the Northern District of New York and agree that service of process upon it mailed by certified mail to its address shall be deemed in every respect effective service of process in any such suit, action or proceeding. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.

 

11.         Securities Law Compliance. The Company, at its own expense, will obtain any registration or qualification required to sell any Securities under the Blue Sky laws of any applicable jurisdictions within the applicable required time periods.

 

12.         Representations and Warranties.

 

The Company and each of its subsidiaries respectively represent and warrant that:

 

(a)          it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder;

 

(b)         this Agreement has been duly authorized and executed and constitutes a legal, valid and binding agreement of such party enforceable in accordance with its terms; and

 

(c)          the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not conflict with or result in a breach of (i) such party’s certificate of incorporation or by-laws or (ii) any agreement to which such party is a party or by which any of its property or assets is bound.

 

13.         Parties; Assignment; Independent Contractor. This Agreement has been and is made solely for the benefit of CRI and the Company and each of the persons, agents, employees, officers, directors and controlling persons referred to in Exhibit A and their respective heirs, executors, personal representatives, successors and assigns, and nothing contained in this Agreement will confer any rights upon, nor will this Agreement be construed to create any rights in, any person who is not party to such Agreement, other than as set forth in this paragraph. The rights and obligations of either party under this Agreement may not be assigned without the prior written consent of the other party hereto and any other purported assignment will be null and void. CRI has been retained under this Agreement as an independent contractor, and it is understood and agreed that this Agreement does not create a fiduciary relationship between CRI and the Company or their respective Boards of Directors. CRI shall not be considered to be the agent of the Company for any purpose whatsoever and CRI is not granted any right or authority to assume or create any obligation or liability, express or implied, on the Company’s behalf, or to bind the Company in any manner whatsoever.

 

14.         Validity. This Agreement contains the entire agreement between the parties hereto. No party has made any statement, agreement or representation, either oral or written, in connection herewith, modifying, adding or changing the terms and conditions herein set forth. No present or past dealings between the parties shall be permitted to contradict or modify the terms hereof. No modification of this Agreement shall be binding unless such modification is in writing and signed by the parties hereto. In case any term of this Agreement will be held invalid, illegal or unenforceable, in whole or in part, the validity of any of the other terms of this Agreement will not in any way be affected thereby.

 

 
 

 

15.         Counterparts. This Agreement may be executed in counterparts and each of such counterparts will for all purposes be deemed to be an original, and such counterparts will together constitute one and the same instrument.

 

16.         Notices. All notices will be in writing and will be effective when delivered in person or sent via facsimile and confirmed by letter, to the party to whom it is addressed at the following addresses or such other address as such party may advise the other in writing (copies shall not constitute notice):

 

If to the Company:

 

AMERICAN BIO MEDICA CORPORATION

122 Smith Road

Kinderhook, New York 12106

ATTN: Corporate Secretary/Chief Compliance Officer

Telephone: 518-758-8158

Facsimile: 518-758-8171

Email: mdwaterhouse@abmc.com

 

with a copy (which shall not constitute notice) to:

 

NOLAN & HELLER, LLP

39 N. Pearl Street

Albany, New York 12207

ATTN: Richard L. Burstein, Esq.

Telephone: 518-449-3300

Facsimile: 518-432-3123

Email: rburstein@nolanandheller.com

 

To the Placement Agent

 

Cantone Research Inc.

766 Shrewsbury Ave

Tinton Falls, NJ 07724

Telephone: 732-450-3500

Facsimile: 732-450-3520

Attention: Anthony Cantone

 

With a copy (which will not constitute notice) to:

 

Christopher P. Flannery, Esq.

4 Hillman Drive

Suite 104

Chadds Ford, PA 19317

Telephone: 610-361-8016

Facsimile: 610-558-4882

 

17.         Best Efforts Engagement. It is expressly understood and acknowledged that CRI’s engagement for the Offering does not constitute any commitment, express or implied, on the part of CRI or of any of its affiliates to purchase or place the Company’s securities or to provide any type of financing and that the Offering will be conducted by CRI on a “best efforts” (no minimum) basis.

 

 
 

 

18.         Announcements. The Company agrees that CRI shall, upon a successful transaction, have the right to place advertisements in financial and other newspapers and journals at its own expense describing its services to the Company hereunder, provided that CRI shall submit a copy of any such advertisement to the Company for its approval, such approval not to be unreasonably withheld, conditioned or delayed. The Company further agrees that it shall not issue any press release in connection with the Offering without CRI’s prior written approval of such press release. The Company further agrees that CRI’s counsel shall have the right to review and comment on any Current Report on Form 8-K regarding the Offering prepared by or on behalf of the Company before the same is filed with the SEC.

 

Very truly yours,

 

CANTONE RESEARCH, INC.

 

By: /S/  Anthony Cantone  
        Anthony Cantone, President  

 

Agreed to and accepted this 25th day of July, 2012

 

AMERICAN BIO MEDICA CORPORATION

 

By: /S/ Melissa A. Waterhouse  
       Melissa A. Waterhouse  
       EVP, Chief Compliance Officer  
       Corporate Secretary  

 

 
 

 

EXHIBIT A

 

TERMS OF THE OFFERING

 

Issuer: American Bio Medica Corporation (ABMC)
   
Issue: ABMC will extend the Original Debentures maturing 8/1/2012 to mature on 8/1/2013 and increase interest to 15% beginning 8/1/2012 (the “Amendments”) and will pay interest quarterly.
   
Investors: Original Debenture Holders who qualify as “Accredited Investors” as defined in Rule 501 of Regulation D and meet the other investor suitability standards.
   
Note price: Par - 100% of Face Value, minimum $1,000 per Replacement Debenture
   
Interest rate: 15% simple in arrears.  The first payment of this higher rate will be made on 11/1/2012.
   
Registration: Company will file a “Special” registration statement as soon as practicable after August 1, 2012 to reflect the change in interest rate and the one year extension of the Original Debentures.  The “Special” registration statement will also reflect the change in strike price and extension of the Placement Agent Warrants previously issued to the Placement Agent (and referenced in “Placement Agent Fee” below.
   
Right of Participation: For as long as any of the Replacement Debentures remain outstanding, the investors (through the Placement Agent) shall have a right of participation in any new fund raising (debt or equity of any kind) undertaken by ABMC.
   
Additional Covenants: The Replacement Debentures will contain provisions prohibiting ABMC from issuing variable priced equity or variable price equity linked Securities.
   
Placement agent fee: 5% in cash of $750,000 ($37,500), plus 75,000 3-year warrants at $.17 per share
   
Expense allowance: Non-accountable 1%
   
Bridge loan: Provided that Holders of at least $650,000 of the Original Debentures agree to the Extended Maturity Date, Cantone Asset Management LLC (“CAM”) (an affiliate of Anthony Cantone, a principal of the Placement Agent) will provide a $150,000 bridge loan maturing 8/1/2013 (1) to pay principal of and accrued interest due on the Original Debentures of those Holders who do not agree to the Debenture Amendments and (2) any excess will be available for working capital.  CAM will be paid 15% interest for one year (regardless if prepaid) on the amount of bridge loan plus 10% in restricted stock valued at .17 per share. ($150,000 bridge loan = $15,000 worth of restricted stock = 88,235 shares).  The Bridge Loan is expected to be re-paid from proceeds of future financing.  If ABMC is involved in any business combination, such as a merger or acquisition, the Bridge Loan would be paid a 30% bonus on the principal amount and paid in full on the closing of that transaction.
   
New funding: ABMC will work with CRI to issue up to $2 million convertible senior secured Notes (the “New Funding”) within the next 12 months that will be collateralized by all assets (including, but not limited to, the Company’s real estate & equipment) currently pledged to First Niagara Financial Group.

 

 
 

 

EXHIBIT B

 

INDEMNIFICATION PROVISIONS

 

Capitalized terms used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached.

 

The Company agrees to indemnify and hold harmless Placement Agent and each of the other Indemnified Parties (as hereinafter defined) from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”), directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, Placement Agent’s acting for the Company, including, without limitation, any act or omission by Placement Agent in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement between the Company and Placement Agent to which these indemnification provisions are attached and form a part, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement or the subscription agreement with the investors (or in any instrument, document or agreement relating thereto, including any agency agreement), or the enforcement by Placement Agent of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification hereunder.

 

The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Placement Agent by the Company or for any other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct.

 

These Indemnification Provisions shall extend to the following persons (collectively, the “Indemnified Parties”): Placement Agent, its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, legal counsel, agents and controlling persons of any of them. These indemnification provisions shall be in addition to any liability, which the Company may otherwise have to any Indemnified Party.

 

If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder, except to the extent that such Indemnified Party’s failure has materially prejudiced the Indemnifying Party’s rights or materially increased its liabilities and obligations hereunder. An Indemnified Party shall have the right to retain counsel of its own choice to represent it at its own expense. Any such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the Company. The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Company’s written consent. The Company shall not, without the prior written consent of Placement Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

 

 
 

 

In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and its stockholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction or transactions to which the Agreement relates relative to the amount of fees actually received by Placement Agent in connection with such transaction or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of fees previously received by Placement Agent pursuant to the Agreement.

 

Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

 

 

 

 

EXHIBIT 4.20

 

BRIDGE LOAN AGREEMENT

 

July 30, 2012

 

AMERICAN BIO MEDICA CORPORATION

122 Smith Road 

Kinderhook, New York 12106

 

RE: Bridge Loan Agreement

 

Dear Mr. Cipkowski:

 

In reference to the pending offering for the extension of $750,000 in existing debt (the “Existing Debt”) of American Bio Medica Corporation, a New York corporation (“ABMC ” or the "Company”) for which the Company has engaged Cantone Research, Inc. (“CRI” or the “Placement Agent”) to act as the Company’s exclusive Placement Agent (the “Offering”), the purpose of this letter is to define the terms of a proposed bridge loan (the “Bridge Loan”) from Cantone Asset Management LLC (“CAM”) to cover any amounts of Existing Debt held by investors who do not wish to extend under the Offering (“Non-Consenting Holders”), and for working capital purposes, in the amount of $150,000. All terms used in this agreement (the “Agreement”) and not defined shall have the same meaning as in the placement agent agreement between the Company and CRI of even date (the “Placement Agreement”).

 

Upon acceptance, (indicated by your signature below), this Agreement will confirm the terms of the bridge loan between CAM and the Company.

 

1.          The Bridge Loan.

 

(a)          On the basis of the representations, warranties and covenants contained in this Agreement, and subject to the terms and conditions of this Agreement, CAM agrees to provide the Bridge Loan to the Company in an amount of $150,000 and the Company agrees to accept the Bridge Loan.

 

(b)          CAM will use the proceeds of the Bridge Loan to directly repay the Non-Consenting Holders, with the balance to be sent to the Company for working capital purposes.

 

2.            Repayment.

 

(a)          The Company will repay the Bridge Loan as required under the related promissory note (the “Note”), a form of which is attached as Exhibit A. The maturity date of the Note will be August 1, 2013 (the “Maturity Date”). The Note will bear simple annual interest in advance of 15% (“Interest”), all of which shall be considered due and payable in accordance with the terms of the Note. The Note shall contain all customary terms and conditions, including events of default and remedies upon default.

 

(b)          In addition to the Interest, upon the funding of the Bridge Loan, the Company will issue CAM restricted common stock of the Company equal to 10% of the principal amount of the Note at a value of $0.17 per share (the “Stock Compensation”). Failure to issue the Stock Compensation shall constitute an event of default under the Note.

 

(c)          The Parties expect that the Company will repay principal and Interest on the Bridge Loan from the proceeds of a proposed issuance of up to $2 Million in Company senior debt (the “Subsequent Financing”). Repayment of the Bridge Loan is based on the terms and conditions of this Agreement and the Note and shall not be affected by the success or lack thereof of any Subsequent Financing.

 

 
 

 

(d)          Change in Control Premium. If the Company is involved in a “change in control” (such as a merger or acquisition) at any time before the Company repays the Bridge Loan in full, the holder of the Note will receive a premium of 30% of the outstanding principal on the Note.

 

3.           Maturity. The Company will repay the principal and Interest on the Note on or before the Maturity Date. If the Company successfully completes the Subsequent Financing in any amount, the Company will repay the Bridge Loan from the Subsequent Financing.

 

4.           Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement will be governed as to validity, interpretation, construction, effect and in all other respects by the internal law of the State of New Jersey. The Company and CAM each (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in the state courts with jurisdiction in Monmouth County, New Jersey, or in the United States District Court for the District of New Jersey, (ii) waives any objection to the venue of any such suit, action or proceeding, and the right to assert that such forum is an inconvenient forum, and (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of Albany, and the United States District Court for the Northern District of New York in any such suit, action or proceeding. The Parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.

 

5. Representations and Warranties.

 

The Company and each of its subsidiaries respectively represent and warrant that:

 

(a) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder;

 

(b) this Agreement has been duly authorized and executed and constitutes a legal, valid and binding agreement of such party enforceable in accordance with its terms; and

 

(c) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not conflict with or result in a breach of (i) such party’s certificate of incorporation or by-laws or (ii) any agreement to which such party is a party or by which any of its property or assets is bound.

 

6.           Validity. This Agreement contains the entire agreement between the Parties. No party has made any statement, agreement or representation, either oral or written, in connection herewith, modifying, adding or changing the terms and conditions herein set forth. No present or past dealings between the parties shall be permitted to contradict or modify the terms hereof. No modification of this Agreement shall be binding unless such modification is in writing and signed by the parties hereto. In case any term of this Agreement will be held invalid, illegal or unenforceable, in whole or in part, the validity of any of the other terms of this Agreement will not in any way be affected thereby.

 

7.           Counterparts. This Agreement may be executed in counterparts and each of such counterparts will for all purposes be deemed to be an original, and such counterparts will together constitute one and the same instrument.

 

8.           Notices. All notices will be in writing and will be effective when delivered in person or sent via facsimile and confirmed by letter, to the Party to whom it is addressed at the following addresses or such other address as such Party may advise the other in writing (copies shall not constitute notice):

 

If to the Company:

 

AMERICAN BIO MEDICA CORPORATION

122 Smith Road

Kinderhook, New York 12106

 

 
 

 

ATTN: Corporate Secretary/Chief Compliance Officer

Telephone: 518-758-8158

Facsimile: 518-758-8171

Email: mdwaterhouse@abmc.com

 

with a copy (which shall not constitute notice) to:

 

NOLAN & HELLER, LLP

39 N. Pearl Street

Albany, New York 12207

ATTN: Richard L. Burstein, Esq.

Telephone: 518-449-3300

Facsimile: 518-432-3123

Email: rburstein@nolanandheller.com

 

To the Placement Agent

 

Cantone Research Inc.

766 Shrewsbury Ave

Tinton Falls, NJ 07724

Telephone: 732-450-3500

Facsimile: 732-450-3520

Attention: Anthony Cantone

 

With a copy (which will not constitute notice) to:

 

Christopher P. Flannery, Esq.

4 Hillman Drive

Suite 104

Chadds Ford, PA 19317

Telephone: 610-361-8016

Facsimile: 610-558-4882

 

Very truly yours,

 

CANTONE RESEARCH, INC.

 

By: /S/ Anthony Cantone  
       Anthony Cantone, President  

 

Agreed to and accepted this 30th day of July, 2012

 

AMERICAN BIO MEDICA CORPORATION

 

By: /S/ Melissa A. Waterhouse  
       Melissa A. Waterhouse  
       EVP, Chief Compliance Officer  
       Corporate Secretary  

 

 

 

 

EXHIBIT 4.21

 

NOTE

 

Tinton Falls, New Jersey

 

$150,000.00 July 31, 2012

 

1.           Obligation. For value received and intending to be legally bound, AMERICAN BIO MEDICA CORPORATION, a New York corporation ("Maker"), hereby promises to pay on or before July 31, 2013 (or earlier as determined below) (the “Due Date”) to the order of CANTONE ASSET MANAGEMENT LLC ("Payee"), the principal sum of ONE-HUNDRED-FIFTY THOUSAND Dollars ($150,000.00), lawful money of the United States of America together with interest thereon in advance in the amount of fifteen percent (15%) simple interest (the “Rate”) on the terms and conditions stated in this Note. The principal sum added to the actual interest, in the total amount of $172,500, is referred to herein as the "Amount Due."

 

a.           The payment under this Note shall be made in funds immediately available to Payee at its office at 766 Shrewsbury Avenue, Tinton Falls, NJ 07724, or at such other location as the holder of this Note shall designate. In the event the due date of any payment under this Note is a Saturday, Sunday or legal holiday in the State of New Jersey, such payment shall be due on the next succeeding date which is not a Saturday, Sunday or such legal holiday, provided that the principal sum shall continue to accrue interest until paid.

 

b.           A single payment of principal and interest in the Amount Due shall be due on the earlier of: (i) the Due Date; or (ii) the closing of a debt financing by the Maker in an amount of at least $1,000,000. The Amount Due shall be due and payable in a lump sum.

 

2.           Prepayment. Maker may prepay all or any portion of the Amount Due at any time without penalty.

 

3.           Application of Payments. All payments on this Note shall be applied first to interest at the Rate and all other sums due hereunder, and the balance thereof to principal or in such other order as Payee may elect.

 

4.            Default; Acceleration; Remedies.

 

a.           Should there occur any Default (as defined below in Section 5(b), then Payee, at its option and without notice to Maker, may declare immediately due and payable the entire unpaid balance of the Amount Due by Maker hereunder, together with interest accrued thereon at the Rate after the Due Date to the date of Default and thereafter at a rate of interest equal to the highest rate of interest allowable under the laws of the State of New Jersey (the "Default Rate"), anything herein to the contrary notwithstanding. Payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided Payee in this Note. If Payee employs counsel to enforce this Note by suit or otherwise, Maker will reimburse Payee for all costs of suit and other expenses in connection therewith, whether or not suit is actually instituted, together with a reasonable attorney's fee for collection of Ten Percent (10%) of the total amount then due by Maker to Payee but in no event less than One Thousand Dollars ($1,000.00) together, to the extent permitted by applicable law, with interest on any judgment obtained by Payee at the Default Rate, including interest at the Default Rate from and after the date of execution, judicial or foreclosure sale until actual payment is made to Payee of the full amount due Payee.

 

b.           As used in this Note, "Default" shall occur immediately upon the happening to or by Maker of any of the following events:

 

(1)         Any default in the payment when due of the Amount Due on the Due Date, or any other sums due, under this Note, which default is not cured within ten (10) days after written notice;

 

(2)         Any default in the performance of any of the provisions of this Note, which is not cured within ten (10) days after Maker receives written notice of that default from Payee;

 

 
 

 

(3)         Any default in payment of any other indebtedness of the Maker, which default is not cured within thirty (30) days of the date of said default;

 

(4)         The making of any misrepresentation to Payee;

 

(5)         The calling of a meeting of creditors;

 

(6)         The appointment of a committee of creditors;

 

(7)         An assignment or offer of settlement for the benefit of creditors;

 

(8)         The voluntary or involuntary application for, or appointment of, a receiver, custodian, guardian, trustee, or other personal representative for Maker or its property;

 

(9)         The filing of a voluntary or involuntary petition under the Bankruptcy Code or any similar state statute;

 

(10)        The occurrence of any other act of insolvency (however expressed or indicated);

 

(11)        The issuance of a warrant of attachment or for distraint, or the notice of tax lien;

 

(12)        An entry of judgment;

 

(13)        The failure to pay, withhold, collect or remit any taxes or tax deficiency when assessed or due, provided however, that so long as no event of Default shall exist and after giving written notice to Payee, Maker may in good faith contest any such tax and permit such tax to remain unpaid during the period under any such contest;

 

(14)        The general failure to pay debts and obligations as the same become due and payable.

 

5.           Remedies Cumulative, Etc.

 

a.           The remedies of Payee provided in this Note shall be cumulative and concurrent, may be pursued singly, successively, or together at the sole discretion of Payee, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

b.           The recovery of any judgment by Payee shall not affect in any manner or to any extent any rights, remedies or powers of Payee under this Note, but such rights, remedies and powers of Payee shall continue unimpaired as before. The exercise by Payee of its rights and remedies and the entry of any judgment by Payee shall not adversely affect in any way the interest rate payable hereunder on any amounts due to Payee but interest shall continue to accrue on such amounts at the rates specified herein.

 

c.           Maker agrees that any action or proceeding against it to enforce this Note may be commenced in the state courts with jurisdiction in Monmouth County, New Jersey, or in any federal court in with jurisdiction in Monmouth County, New Jersey. Maker also consents to venue in any federal court having subject matter jurisdiction located in the District of New Jersey. The provisions of this Section shall not limit or otherwise affect the right of Payee to institute and conduct action in any other appropriate manner, jurisdiction or court.

 

6.           Additional Waivers. Maker hereby waives presentment for payment, demand, demand for payment, notice of demand, notice of nonpayment or dishonor, notice of acceleration, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of the Note. Maker agrees that its liability shall be unconditional without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee. Maker consents to any and all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to payment or other provisions of this Note.

 

 
 

 

7.           Costs and Expenses. Maker shall pay upon demand all reasonable costs and expenses incurred by Payee in the exercise of any of its rights, remedies or powers under this Note and any amount thereof not paid promptly following demand therefor shall be added to the principal sum hereunder and shall bear interest at the Default Rate from the date of such demand until paid in full.

 

8.           Severability. If any provision of this Note is held to be invalid or unenforceable by a court of competent jurisdiction, the other provisions of this Note shall remain in full force and effect and shall be liberally construed in favor of Payee in order to effectuate the provisions of this Note.

 

9.           Limitation of Interest to Maximum Lawful Rate. In no event shall the rate of interest payable hereunder exceed the maximum rate of interest permitted to be charged by applicable law (including choice of law rules) and any interest paid in excess of the permitted rate shall be refunded to Maker. Such refund shall be made by application of the excessive amount of interest paid against any sums outstanding under this Note and shall be applied on such order as Payee may determine. If the excessive amount of interest paid exceeds the sums outstanding under this Note, the portion exceeding the sums outstanding under this Note shall be refunded in cash by Payee. Any such crediting or refund shall not cure or waive any default by Maker hereunder. Maker agrees, however, that in determining whether or not any interest payable under this Note exceeds the highest rate permitted by law, any non principal payment, including without limitation prepayment fees and late charges, shall be deemed to the extent permitted by law to be an expense, fee, premium or penalty rather than interest.

 

10.         Limitation on Payee's Waivers. Payee shall not be deemed, by any act or omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specifically set forth in the writing. A waiver as to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.

 

11.         No Offset. The obligations of Maker under this Note shall not be subject to any abatement or offset as a consequence of any claim, event or transaction otherwise occurring or arising between Maker, Payee and/or any affiliate of any of them, except as Maker and Payee may otherwise agree.

 

12.         Applicable Law. This instrument shall be governed by and construed according to the laws of the State of New Jersey.

 

13.         Captions. The captions or headings of the paragraphs in this Note are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of the Note.

 

14.        Pronouns. Pronouns used herein shall be deemed to include the masculine, feminine or neuter, singular or plural, as their contexts may require. The words "Payee" and "Maker" shall be deemed to include the respective heirs, personal representatives, successors and assigns of Payee and Maker.

 

15.         Construction. The language in this Agreement shall be construed as a whole according to its fair meaning, strictly neither for nor against any party, and without implying a presumption that its terms shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the person who drafted it.

 

16.         Computation. The unpaid principal amount of this Note, the unpaid interest accrued thereon, the interest rate or rates applicable to such unpaid principal amount, the duration of such applicability, and all other Amounts Due owing by Maker to Payee pursuant to this Note shall at all times be ascertained from the records of Payee, which shall be conclusive absent manifest error.

 

 
 

 

17.         Assignment. This Note may not be assigned or otherwise transferred by Maker without the prior written consent of Payee.

 

18.         Stamp Taxes. Maker shall pay the cost of any revenue, tax or other stamps now or hereafter required by the laws of the State of New Jersey (or any of its political subdivisions) or the United States of America to be affixed to this note, and if any taxes are imposed under the laws of the State of New Jersey (or any of its political subdivisions) or the United States of America with respect to evidences of indebtedness, Maker shall pay or reimburse Payee upon demand the amount of such taxes without credit against any indebtedness evidenced by this Note.

 

19.         Notices. All notices, requests, waivers, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given, made and received when hand delivered against receipt, or on the day after it is sent by United States certified or registered mail, postage prepaid, return receipt requested, by nationally recognized overnight courier service, or by fax, to:

 

If to Maker:

 

AMERICAN BIO MEDICA CORPORATION

122 Smith Road

Kinderhook, New York 12106

ATTN: Corporate Secretary/Chief Compliance Officer

Telephone: 518-758-8158

Facsimile: 518-758-8171

Email: mdwaterhouse@abmc.com

 

If to Payee:

 

Cantone Asset Management LLC

766 Shrewsbury Ave

Tinton Falls, NJ 07724

Telephone: 732-450-3500

Facsimile: 732-450-3520

Attention: Anthony Cantone

 

or such other address as shall be specified from time to time (in compliance with the requirements of this Section 20 for the giving of notice) by the parties entitled to receive such notices.

 

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed the day and year first above written.

 

MAKER:

 

AMERICAN BIO MEDICA CORPORATION

 

By: /S/ Melissa A. Waterhouse  
        Melissa A. Waterhouse  
        EVP, Chief Compliance Officer  
        Corporate Secretary