Exhibit 4.2 Investor Registration Rights Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of August
22, 2001, by and among American Bio Medica Corporation, a New York corporation
(the "Company"), and the persons signing the signature page of this Agreement
who have entered into Subscription Agreements, dated August 2001, to purchase
the Company's common stock (the "Shareholders").
RECITALS
A. Pursuant to Subscription Agreements, dated August 2001 (the
"Subscription Agreements"), the Shareholders have purchased shares (the "Common
Shares") of the Company's common stock, par value $0.01 per share ("Common
Stock"), and warrants (the "Common Stock Warrants") entitling the holders
thereof to purchase the number of shares (the "Warrant Shares") of Common Stock
as set forth therein.
B. To induce the Shareholders to purchase Common Shares and Common
Stock Warrants, the Company has agreed to provide the Shareholders with certain
registration rights described herein.
THEREFORE, in consideration of the promises and the mutual covenants
and agreements contained in the Subscription Agreements and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
Person. An individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
Prospectus. The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement,
including post-effective amendments and all material incorporated by
reference in the prospectus.
Registration Statement. Any registration statement of the
Company which covers any of the Registrable Securities (as defined in
Section 2 hereof) pursuant to the provisions of this Agreement,
including the registration statement and amendments and post-effective
amendments thereto, the Prospectus and supplements therein, all
exhibits and all material incorporated by reference in the registration
statement.
SEC. The U.S. Securities and Exchange Commission.
Securities Act. The Securities Act of 1933, as amended.
Shares. The Common Shares and the Warrant Shares.
2. Securities Subject to this Agreement. The securities entitled to the
benefit of this Agreement are all the Shares and the Common Stock Warrants (the
"Registrable Securities"); provided, however, that the Shares and the Common
Stock Warrants shall be Registrable Securities only for so long as the Shares
and the Common Stock Warrants continue to be Restricted Securities. For purposes
of this Agreement, the Shares and the Common Stock Warrants shall be Restricted
Securities as of the date of this Agreement. The Shares and the Common Stock
Warrants shall cease to be Restricted Securities when (1) the Company has
effectively registered the Shares and the Common Stock Warrants under the
Securities Act and the Shareholders who own the Shares and the Common Stock
Warrants, have disposed of the Shares and the Common Stock Warrants in
accordance with the Registration Statement covering the Shares and the Common
Stock Warrants, (2) the Shareholders who own Shares and Common Stock Warrants,
shall be eligible to sell the Shares and the Common Stock Warrants to the public
in accordance with all applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act, or such Shares and Common
Stock Warrants may be sold pursuant to Rule 144(k) (or any similar provision
then in force) under the Securities Act, and are freely tradable after such sale
by the transferee, (3) the Shareholders have otherwise transferred the Shares
and the Common Stock Warrants (except as otherwise provided in Section 7(h)
hereof), or (4) such Shares or Common Stock Warrants shall have ceased to be
outstanding.
3. Registration of Registrable Securities. On or before the later of
(i) August 15, 2001 or (ii) the thirtieth business day after the date American
Bio Medica issues Common Shares and Common Stock Warrants, the Company will use
its best efforts to cause a Registration Statement to be filed with the SEC
covering the Registrable Securities. The Company shall also use its commercially
reasonable efforts to cause such Registration Statement to become effective
within 45 days after such filing (or 90 days if reviewed by the Staff of the
SEC) and, subject to the provisions of Section 2 hereof, remain effective until
two years after the last date Common Shares and Common Stock Warrants are issued
to such Shareholders pursuant to the Subscription Agreements.
4. Registration Procedures.
(a) The Company shall:
(i) furnish to the Shareholders, without charge, at least one
signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated by reference therein and all exhibits (including
those incorporated by reference);
(ii) deliver to the Shareholders, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) and
any amendment or supplement thereto as they may reasonably request, but
only while the Company is required to cause the Registration Statement
to remain effective;
(iii) prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Shareholders and their
respective counsel in connection with the registration or qualification
of the Registrable Securities for offer and sale under the securities
laws of the various states (the "Blue Sky Laws") and do any and all
other acts or things reasonably necessary or advisable to effect the
registration or qualification of the Registrable Securities covered by
the Registration Statement in the various states; provided, however,
that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now qualified or to take
any action which would subject it to taxation or service of process in
suits other than those arising out of the offer or sale of the
securities covered by such Registration Statement in any jurisdictions
where it is not now so subject;
(iv) cooperate with the Shareholders to prepare and deliver
timely certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and issue the Registrable
Securities in the denominations and register them in the names the
Shareholders may request at least two (2) business days prior to any
sale of Registrable Securities;
(v) use its best efforts to cause a Notification Form for
Listing of Additional Shares to be filed with The Nasdaq Stock Market
with respect to the Registrable Securities being registered or to cause
similar required forms to be filed with the market on which similar
securities issued by the Company are then listed or traded; and
(vi) make available to the Shareholders and any attorney or
accountant retained by the Shareholders for inspection all financial
and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to
supply all information that the participating Shareholders, the
Shareholders' representatives, attorneys or accountants may reasonably
request in connection with the registration; provided, that such
Persons shall keep confidential any records, information or documents
that the Company designates as confidential unless a court or
administrative agency requires the disclosure of the records,
information or documents.
(b) Each of the Shareholders agrees to furnish the Company with any
information regarding the Shareholders and the distribution of the Registrable
Securities as the Company may from time to time reasonably request.
(c) The Shareholders agree that, upon receipt of any notice from the
Company of the happening of any of the following: (i) the SEC's issuance of any
stop order denying or suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceeding for that purpose, (ii) the
Company's receipt of any stop order denying registration or suspending the
qualification of the Registrable Securities for sale or the initiation or
threatening of any proceeding for such purpose, or (iii) the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated by reference therein untrue or which
requires any change in the Registration Statement, the Prospectus or any
document incorporated by reference therein to make the statements not include an
untrue statement of material fact or not omit any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, the Shareholders shall discontinue the
disposition of Registrable Securities until the Shareholders receive a
supplemented or amended Prospectus from the Company or until the Company advises
the Shareholders in writing that the participating Shareholders may resume the
use of the Prospectus, and have received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus. If
the Company so directs, the Shareholders will deliver to the Company all copies,
other than permanent file copies then in the Shareholders' possession, of the
Prospectus covering the Registrable Securities at the time the Shareholders
received the notice.
5. Registration Expenses. Regardless of when the Registration Statement
becomes effective, the Company shall bear all costs and expenses incident to the
Company's performance of, or compliance with, this Agreement, including without
limitation all registration and filing fees, fees and expenses of compliance
with the Blue Sky Laws, printing expenses, messenger, telephone and delivery
expenses, and fees and disbursements of counsel for the Company, all independent
certified public accountants of the Company, and fees and expenses of other
Persons retained by the Company relating to the distribution of the Registrable
Securities (all such expenses being called "Registration Expenses"). The
participating Shareholders shall in all cases bear all discounts, fees or
commissions incident to the sale of the Shareholders' Registrable Securities and
any fees of any attorney or accountant retained by any of the Shareholders.
6. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, the
Shareholders against all losses, claims, damages, liabilities and
expenses, joint or several, to which the Shareholders may become
subject under the Securities Act or any state securities law, or any
rule or regulation promulgated under the Securities Act or otherwise
which arise out of, or are caused by, the Company's violation of the
Securities Act or any state securities laws, or any rule or regulation
promulgated under the Securities Act, including, but not limited to,
any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus or preliminary Prospectus or in
any application or other request that the Company files, including any
application or request filed under the Blue Sky Laws, or any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as the same are based upon an untrue or
alleged untrue statement or omission or alleged omission so made which
is contained in information furnished to the Company by any of the
Shareholders expressly for use therein or by any Shareholder's failure
to deliver a copy of the Registration Statement or Prospectus after the
Company has furnished the participating Shareholders with a copy of the
same. The Company will reimburse the Shareholders for any legal or
other expense the Shareholders reasonably incur in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding. The Company will also indemnify the selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and
each Person who controls such persons (within the meaning of the
Securities Act) to the same extent as provided above with respect to
the indemnification of the Shareholders, if requested.
(b) Indemnification by the Shareholders. In connection with
any Registration Statement in which any Shareholder's Registrable
Securities are registered and sold, the participating Shareholders
shall furnish to the Company the information and affidavits as the
Company reasonably requests for use in connection with any Registration
Statement or Prospectus and agree, jointly and severally, to indemnify
and hold harmless, to the full extent permitted by law, the Company,
its officers directors and each Person who controls the Company (within
the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue
statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the Registration Statement,
Prospectus, preliminary Prospectus or any application filed under the
Blue Sky Laws or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that the untrue
statement or omission is contained in any information or affidavit so
furnished by the Shareholder to the Company specifically for inclusion
in the Registration Statement, Prospectus or application filed under
the Blue Sky Laws. The Company shall be entitled to receive indemnities
from selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as
provided above with respect to information so furnished by the Persons
specifically for inclusion in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (1) promptly notify the
indemnifying party of any claim with respect to which it seeks
indemnification and (2) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the
indemnified party. Any Person entitled to indemnification hereunder
shall have the right to employ separate counsel and to participate in
the defense of the claim, but the fees and expenses of the counsel
shall be at the expense of the Person unless (A) the indemnifying party
has agreed to pay the fees or expenses, (B) the indemnifying party
shall have failed to assume the defense of the claim and employ counsel
reasonably satisfactory to the Person, or (C) in the reasonable
judgment of the Person, based upon advice of its counsel, a conflict of
interest may exist between the Person and the indemnifying party with
respect to the claims (in which case, if the Person notifies the
indemnifying party in writing that the Person elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of the claim on
behalf of the Person). The indemnifying party will not be subject to
any liability for any settlement made without its consent. The
indemnifying party, however, may not unreasonably withhold its consent.
No indemnifying party will be required to consent to the entry of any
judgment or to enter into any settlement which does not include as an
unconditional term the claimant's or plaintiff's release of the
indemnified party from all liability in respect to the claim or
litigation. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified
by the indemnifying party with respect to the claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified
parties with respect to the claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) Contribution. If for any reason the indemnification
provided for in the preceding clauses (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated
by the preceding clauses (a) and (b), then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of the loss, claim, damage liability or expense in the
proportion as is appropriate to reflect (1) the relative benefits
received by the indemnified party and the indemnifying party, (2) the
relative fault of the indemnified party and the indemnifying party, and
(3) any other relevant equitable considerations.
(e) The indemnities provided in this Section 6 shall survive
the Shareholders' transfer of any Registrable Securities.
7. Miscellaneous.
(a) Other Agreements. The Shareholders acknowledge that the
Company has granted registration rights to others and the rights
granted in this Agreement are subject to those rights already granted.
(b) Amendments and Waivers. No amendment, modification,
supplement or waiver of any provision of this Agreement is binding on
any party unless the party consents in writing thereto.
(c) Notices. Any notice or other communication required or
which may be given under this Agreement shall be in writing and either
delivered personally to the addressee, telegraphed, telecopied or
telexed to the addressee, sent by overnight courier to the addressee or
mailed, certified or registered mail, postage prepaid, and shall be
deemed given when so delivered personally, telegraphed, telecopied or
telexed to the addressee, or, if sent by overnight courier, on the day
delivery is guaranteed by such courier, or, if mailed, three business
days after the date of mailing, as follows:
(i) to the Shareholders, at the most current address
given by the Shareholders to the Company pursuant to the
Subscription Agreements or otherwise.
(ii) To American Bio Medica at:
American Bio Medica Corporation
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: President
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx, Esq.
Any of the foregoing may change its address for notices by notice to
the other parties.
(d) Governing Law and Forum. The laws of the State of New York
shall govern this Agreement, its construction, and the determination of
any rights, duties or remedies of the parties arising out of, or
relating to, this Agreement (regardless of the laws that might
otherwise govern under applicable New York principles of conflicts of
law). The parties acknowledge that the United States District Court for
the Southern District of New York or the New York Supreme Court for the
County of Columbia shall have exclusive jurisdiction over any case or
controversy arising out of, or relating to, this Agreement and that all
litigation arising out of, or relating to, this Agreement shall be
commenced in the United States District Court for the Southern District
of New York or in the Columbia County (New York) Supreme Court. Each of
the parties consents to be subject to personal jurisdiction of the
courts of New York, including the federal courts in New York.
(e) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(f) Interpretation. The Section headings contained in this
Agreement are for the purposes of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
(g) Severability. If any provision of this Agreement is
determined to be illegal or invalid, such illegality or invalidity
shall have no effect on the other provisions of this Agreement, and all
other provisions of this Agreement shall remain valid, operative and
enforceable.
(h) Assignment. The rights granted to the Shareholders
pursuant to this Agreement shall not be assignable without the written
consent of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
President
INVESTORS
/s/ A. Xxxxx Xxxxxx
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/s/ Xxxxxx S, Xxxxxxxx
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Xxx Xxxxx W.G. Limited
/s/ A.S. Xxxxxxx
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Its: Director
/s/ Xxxxxx X. Xxxxxx
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/s/ Xxxxx X. Rochester
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/s/ X.X. Xxxxxxxx
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/s/ X.X. Xxxxxxxx
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Xxxxx Xxxxxx & Co., Inc. Profit Sharing Plan
/s/ A. Xxxxx Xxxxxx
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Its: President & Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxxx
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/s/ Xxxxx X. Xxxxxx
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/s/ Xxxx X. Xxxxx, MD
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/s/ E. Xxxxxx Xxxxxxxx
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/s/ Xxxxx Xxxxx
Pequod Investments, L.P.
/s/ Xxxxxxxx Xxxxxx
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Its: General Partner
Pequod International, LTD.
/s/ Xxxxxxxx Xxxxxx
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Its: Investment Advisor
Kingsbridge Capital, LTD.
/s/ Xxxx Xxxxxx
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Its: Director
M.K. Global Technology Partners, L.P.
/s/ Xxxxx Xxxxxxx
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X.X. Capital Corp.
Its: President & CEO
Aspira Capital Management, L.P.
/s/ Xxxxx Xxxxxxx
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X.X. Capital Corp.
Its: President & CEO
/s/ Xxxxx Xxxxxxx
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/s/ Xxxx X. Xxxxxx
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/s/ Xxxxx X. Xxxxxx
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/s/ Xxxxx Xxxxx
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/s/ Xxxxxxx X. Xxxxx
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