AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
AMENDMENT
NO. 1
THIS
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT (this “Amendment”) is
made as of January 28, 2005, by and among Chembio Diagnostics, Inc., a Nevada
corporation (the “Company”), and
the purchasers executing the signature pages hereto (the “Initial
Purchasers”).
PRELIMINARY
STATEMENTS
A. The
Company and the Initial Purchasers are parties to a Securities Purchase
Agreement dated as of January 28, 2005 (the “Original
Agreement”),
pursuant to which Initial Purchasers who were party thereto purchased shares of
9% Series B Convertible Preferred Stock (the “Series
B Preferred Stock”) and
warrants to purchase shares of Series B Preferred Stock (the “Warrants”) from
the Company.
B. Certain
additional purchasers (the “Additional
Purchasers,” and
together with the Initial Purchasers, the “Purchasers”) have
agreed to purchase additional shares of Series B Preferred Stock from the
Company (the “Additional
Shares”) and
additional warrants to purchase shares Series B Preferred Stock (the
“Additional
Warrants”).
C. The
Company and the Purchasers have agreed to amend the Original Agreement as
provided herein (as amended, the “Agreement”).
D. The
undersigned hold one hundred percent (100%) of the Series B Preferred Stock
necessary in order to amend the Original Agreement pursuant to Section 5.5
thereof.
E. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Original Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, covenants
and conditions set forth herein and in the Agreement (as amended hereby), the
parties hereto hereby agree as follows:
1. Subject
to the terms and conditions of the Agreement, each Additional Purchaser agrees,
severally and not jointly, to purchase at the Second Closing (as defined below),
and the Company agrees to sell and issue to each Additional Purchaser at the
Second Closing, (a) that number of shares of the Company’s Series B
Preferred Stock set forth below such Additional Purchaser’s name on its
respective executed signature page to the Agreement at a purchase price per
share equal to the Stated Value, and (b) Additional Warrants as determined
pursuant to Section 2.2(a)(iii) of the Agreement.
2. Section
2.1 of the Original Agreement is hereby amended and restated in its entirety as
follows:
“The
Company agrees to sell, and each Purchaser agrees to purchase in the aggregate,
severally and not jointly, up to $6,067,500 of shares of Preferred Stock with an
aggregated Stated Value equal to such Purchaser’s Subscription Amount and
Warrants as determined by pursuant to Section 2.2(a)(iii). The aggregate number
of shares of Preferred Stock sold hereunder shall be up to 175. The Closings
shall take place in three stages as set forth below (respectively, the
“First
Closing”,
“Second
Closing” and the
“Third
Closing”). Upon
satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closings
shall occur at the offices of FW, or such other location as the parties shall
mutually agree.
(a) First
Closing. The
First Closing shall be for an aggregate Subscription Amount of up to $5,000,000,
and shall occur within 5 Trading Days of the date hereof. The First Closing
Subscription Amount of Crestview Capital Master, LLC shall be equal to
$3,000,000 and the aggregate First Closing Subscription Amount of the additional
Purchasers, not including Crestview Capital Master, LLC shall be up to
$2,000,000.
(b) Second
Closing. The
Second Closing shall be for an aggregate Subscription Amount of $67,500 ($20,000
of such consideration shall consist of shares of the Company’s Series A
Convertible Preferred Stock (based on their original stated value), together
with accompanying warrants, to be exchanged for shares of Series B Preferred
Stock pursuant to the Company’s Series A Convertible Preferred Stock and Warrant
Purchase Agreement), and shall occur upon the execution by the Company and the
Additional Purchasers of counterpart signature pages to the Agreement, but in no
event later than February 28, 2005.
(c) Third
Closing. The
Third Closing shall be for an aggregate Subscription Amount of up to $1,000,000
from Crestview Capital Master, LLC, and shall occur within five Trading Days of
notice by the Company to Crestview of the event that the Company has achieved at
least $5,000,000 in aggregate contract revenues and an annualized gross profit
of at least $2,250,000 as of any fiscal quarter of 2005 (as reported in the SEC
Reports).”
3. The
definition of “Subscription Amount” is hereby amended and restated in its
entirety as follows: “
““Subscription
Amount” means, as to each Purchaser, the amounts set forth below such
Purchaser’s signature block on the signature pages hereto and next to the
headings “First Closing Subscription Amount”, “Second Closing Subscription
Amount” and the “Third Closing Subscription Amount”, in United States Dollars
and in immediately available funds.”
4. The
Company hereby confirms, represents and warrants that the representations and
warranties of the Company contained in the Agreement (as amended hereby) are
true and correct as of the date hereof as though made as of the date hereof,
except as set forth on the updated Disclosure Schedules (the “Disclosure
Schedules”)
furnished to each participating Purchaser in connection with this
Amendment.
5. The
Company and the Initial Purchasers, by execution of this Amendment, hereby
acknowledge that the definition of “Registrable Securities” in the Company’s
Registration Rights Agreement dated as of January 26, 2005 shall include the
Additional Shares and the shares underlying the exercise of the Additional
Warrants.
6. Except as
specifically provided in this Amendment, there are no amendments, revisions or
other modifications to the Agreement. All other terms and conditions of the
Agreement are hereby incorporated by reference and shall remain in full force
and effect and apply fully to this Amendment.
7. This
Amendment shall be governed by and construed under the laws of the State of New
York as applied to agreements among New York residents entered into and to be
performed entirely within New York.
8. This
Amendment 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.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.
CHEMBIO
DIAGNOSTICS, INC.
/s/
Xxxxxxxx X. Xxxxxxx
Xxxxxxxx
X. Xxxxxxx
President
Signature:
Title:_______________
Tax ID#: __________________