EXHIBIT
4.26
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 individuals more specifically
identified on the signature pages of this Agreement (the
“Purchasers”). Throughout this Agreement, the Company
and the Purchasers 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 Purchasers, and each Purchaser, severally and not jointly,
desires to purchase from the Company, in the aggregate 2,000,000
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 each Purchaser agrees 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.
“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 $0.10 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,
as to each Purchaser the amounts set forth below such
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.
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 each Purchaser agrees to purchase on
the Closing Date, severally and not jointly, Common Stock for an
aggregate purchase price of $200,000. At the Closing, the
Purchasers shall purchase, severally and not jointly, and the
Company shall issue and sell, in the aggregate, up to $200,000 of
Common Stock. Each Purchaser shall purchase from the Company, and
the Company shall issue and sell to each 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 each
Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a stock certificate evidencing a number of Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such
Purchaser;
(b)
At the Closing each Purchaser shall
deliver or cause to be delivered to the Company the
following:
(i)
this Agreement duly executed by such Purchaser;
(ii)
such 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.
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 each
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
November 14, 2018.
(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.
(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, (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 and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. 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.
(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 officers 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, 2018 (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 officers about the effectiveness of the disclosure
controls and procedures based on their 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 Purchasers 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 Purchasers 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.
Each Purchaser, for itself and for
no other Purchaser, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as
follows:
(a)
Authority;
Conflicts.
Such 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 such Purchaser, and when
delivered by such Purchaser in accordance with terms hereof, will
constitute the valid and legally binding obligation of such
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.
(b)
Investment Intent.
Such 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). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such 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 such Purchaser was offered the Securities, it was, and
at the date hereof it is an “Accredited Investor. Such
Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act.
(d)
Experience of Such
Purchaser.
Such 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. Such 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, 2017 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
. Such 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 a 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 a Purchaser under this
Agreement.
(b)
The Purchasers agree 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 a 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, such 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 a 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 any 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 any Purchaser owns
Securities, if the Company is not required to file reports pursuant
to such laws, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers 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 any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory
agency, without the prior written consent of such 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 Purchasers 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 Purchasers under this Agreement will be made or enforced by
the Company that any 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 any
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 Purchasers. The foregoing covenant shall apply only
to those securities acquired by a Purchaser or its affiliates under
this Agreement, and not to any securities of the Company held or
subsequently acquired by a 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 any
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 each
Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
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 Purchasers.
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 each
Purchaser. Any Purchaser may assign any or all of its rights under
this Agreement to any Person to whom such 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
“Purchasers”.
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.
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 any
Purchaser pursuant to any Transaction Document or a 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.
5.16
Independent Nature of
Purchasers’ Obligations and Rights
. The obligations of
each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document.
Nothing contained herein or in any Transaction Document, and no
action taken by any Purchaser pursuant thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that
the Purchasers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the
Transaction Document. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser, if the so choose, is
represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.
(Signature
pages follow)
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 first indicated
above.
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AMERICAN BIO MEDICA CORPORATION
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Address
for Notice:
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Attention: Chief
Executive Officer
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122
Smith Road
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By:
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Kinderhook, New
York 12106
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Melissa
A. Waterhouse
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Telephone:
518-758-8158
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Facsimile:
517-758-8171
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Its:
Chief Executive Officer/Director
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Email:
mdwaterhouse@abmc.com
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REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
(SIGNATURE
PAGES FOR PURCHASERS FOLLOW)
PURCHASER’S
SIGNATURE PAGE
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INVESTOR
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Address
for Notice:
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By:
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Print
Name:
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Telephone:
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Facsimile:
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Email:
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Subscription
Amount:
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Shares:
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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
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Name:
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Residence
Address:
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Country
of Residence:
Personal Email:
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Residence
Telephone #:
Cellular Telephone #:
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Employer:
Job
Title:
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Business Telephone
#:
Work
Email:
Last
four digits of the Investor’s Social Security Number:
3.
Financial
Information:
(a)
2018 expected
income (check appropriate box)
(b)
2017 income (check
appropriate box)
(c)
2016 income (check
appropriate box)
(d)
Over the next five
years, current level of income is expected to:
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.
Please
email the completed questionnaire to
mdwaterhouse@abmc.com