PURCHASE AGREEMENT
EXHIBIT
10.45
PURCHASE AGREEMENT (the
“Agreement”), dated as of
December 8, 2020, by and between AMERICAN BIO MEDICA CORPORATION, a New
York corporation (the “Company”), and
LINCOLN PARK CAPITAL FUND,
LLC, an Illinois limited liability company (the
“Investor”).
Subject to the terms and conditions set forth in
this Agreement, the Company wishes to sell to the Investor, and the
Investor wishes to buy from the Company, up to Ten Million Two
Hundred Fifty Thousand Dollars ($10,250,000) of the Company's
common stock, $0.01 par value per share (the "Common
Stock"). The shares of Common
Stock to be purchased hereunder (including, without limitation, the
Initial Purchase Shares and the Tranche Purchase Shares (each as
defined herein)) are referred to herein as the
“Purchase
Shares.”
For
purposes of this Agreement, the following terms shall have the
following meanings:
(a) “Accelerated
Purchase Date” means, with respect to any Accelerated
Purchase made pursuant to Section 2(c) hereof, the
Business Day immediately following the applicable Purchase Date
with respect to the corresponding Regular Purchase referred to in
clause (i) of the second sentence of Section 2(c)
hereof.
(b) “Accelerated
Purchase Floor Price” means $0.10, which shall be
appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction and,
effective upon the consummation of any such reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction, the Accelerated Purchase Floor Price shall mean the
lower of (i) the
adjusted price and (ii) $0.25.
(c) “Accelerated
Purchase Minimum Price Threshold” means, with respect
to any Accelerated Purchase made pursuant to Section 2(c) hereof, the
greater of (i) seventy-five percent (75%) of the Closing Sale Price
of the Common Stock on the applicable Purchase Date with respect to
the corresponding Regular Purchase referred to in clause (i) of the
second sentence of Section
2(c) hereof and (ii) the minimum per share price threshold
set forth by the Company in the applicable Accelerated Purchase
Notice.
(d) “Accelerated
Purchase Notice” means, with respect to an Accelerated
Purchase made pursuant to Section 2(c) hereof, an
irrevocable written notice from the Company to the Investor
directing the Investor to purchase the number of Purchase Shares
specified by the Company therein as the Accelerated Purchase Share
Amount to be purchased by the Investor (such specified Accelerated
Purchase Share Amount subject to adjustment in accordance with
Section 2(c) hereof
as necessary to give effect to the Purchase Share amount
limitations applicable to such Accelerated Purchase Share Amount as
set forth in this Agreement) at the applicable Accelerated Purchase
Price on the applicable Accelerated Purchase Date for such
Accelerated Purchase.
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(e) “Accelerated
Purchase Price” means, with respect to an Accelerated
Purchase made pursuant to Section 2(c) hereof,
ninety-five percent (95%) of the lower of (i) the VWAP for the
period beginning at 9:30:01 a.m., Eastern time, on the applicable
Accelerated Purchase Date, or such other time publicly announced by
the Principal Market as the official open (or commencement) of
trading on the Principal Market on such applicable Accelerated
Purchase Date (the “Accelerated Purchase Commencement
Time”), and ending at the earliest of (A) 4:00:00
p.m., Eastern time, on such applicable Accelerated Purchase Date,
or such other time publicly announced by the Principal Market as
the official close of trading on the Principal Market on such
applicable Accelerated Purchase Date, (B) such time, from and after
the Accelerated Purchase Commencement Time for such Accelerated
Purchase, that the total number (or volume) of shares of Common
Stock traded on the Principal Market has exceeded the applicable
Accelerated Purchase Share Volume Maximum, and (C) such time, from
and after the Accelerated Purchase Commencement Time for such
Accelerated Purchase, that the Sale Price has fallen below the
applicable Accelerated Purchase Minimum Price Threshold (such
earliest of (i)(A), (i)(B) and (i)(C) above, the
“Accelerated
Purchase Termination Time”), and (ii) the Closing Sale
Price of the Common Stock on such applicable Accelerated Purchase
Date (to be appropriately adjusted for any applicable
reorganization, recapitalization, non-cash dividend, stock split,
reverse stock split or other similar transaction).
(f)
“Accelerated
Purchase Share Amount” means, with respect to an
Accelerated Purchase made pursuant to Section 2(c) hereof, the number
of Purchase Shares directed by the Company to be purchased by the
Investor in an applicable Accelerated Purchase Notice, which number
of Purchase Shares shall not exceed the lesser of (i) 300% of the
number of Purchase Shares directed by the Company to be purchased
by the Investor pursuant to the corresponding Regular Purchase
Notice for the corresponding Regular Purchase referred to in clause
(i) of the second sentence of Section 2(c) hereof (such
corresponding Regular Purchase being subject to the Purchase Share
limitations contained in Section 2(b) hereof) and (ii)
an amount equal to (A) the Accelerated Purchase Share Percentage
multiplied by (B) the total number (or volume) of shares of Common
Stock traded on the Principal Market during the period on the
applicable Accelerated Purchase Date beginning at the Accelerated
Purchase Commencement Time for such Accelerated Purchase and ending
at the Accelerated Purchase Termination Time for such Accelerated
Purchase.
(g) “Accelerated
Purchase Share Percentage” means, with respect to an
Accelerated Purchase made pursuant to Section 2(c) hereof, twenty
percent (20%).
(h) “Accelerated
Purchase Share Volume Maximum” means, with respect to
an Accelerated Purchase made pursuant to Section 2(c) hereof, a number
of shares of Common Stock equal to (i) the number of Purchase
Shares specified by the Company in the applicable Accelerated
Purchase Notice as the Accelerated Purchase Share Amount to be
purchased by the Investor in such Accelerated Purchase, divided by
(ii) the Accelerated Purchase Share Percentage (to be appropriately
adjusted for any applicable reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other
similar transaction).
(i) “Additional
Accelerated Purchase Date” means, with respect to an
Additional Accelerated Purchase made pursuant to Section 2(d) hereof, the
Business Day (i) that is the Accelerated Purchase Date with respect
to the corresponding Accelerated Purchase referred to in clause (i)
of the proviso in the second sentence of Section 2(d) hereof and (ii) on
which the Investor receives, prior to 1:00 p.m., Eastern time, on
such Business Day, a valid Additional Accelerated Purchase Notice
for such Additional Accelerated Purchase in accordance with this
Agreement.
(j) “Additional
Accelerated Purchase Floor Price” means $0.10, which
shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction and, effective upon the consummation of any such
reorganization, recapitalization, non-cash dividend, stock split or
other similar transaction, the Additional Accelerated Purchase
Floor Price shall mean the lower of (i) the adjusted price
and (ii) $0.25.
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(k) “Additional
Accelerated Purchase Minimum Price Threshold” means,
with respect to an Additional Accelerated Purchase made pursuant to
Section 2(d)
hereof, the greater of (i) seventy-five percent (75%) of the
Closing Sale Price of the Common Stock on the Business Day
immediately preceding the applicable Additional Accelerated
Purchase Date with respect to such Additional Accelerated Purchase
and (ii) the minimum per share price threshold set forth by the
Company in the applicable Additional Accelerated Purchase
Notice.
(l) “Additional
Accelerated Purchase Notice” means, with respect to an
Additional Accelerated Purchase made pursuant to Section 2(d) hereof, an
irrevocable written notice from the Company to the Investor
directing the Investor to purchase the number of Purchase Shares
specified by the Company therein as the Additional Accelerated
Purchase Share Amount to be purchased by the Investor (such
specified Additional Accelerated Purchase Share Amount subject to
adjustment in accordance with Section 2(d) hereof as
necessary to give effect to the Purchase Share amount limitations
applicable to such Additional Accelerated Purchase Share Amount as
set forth in this Agreement) at the applicable Additional
Accelerated Purchase Price on the applicable Additional Accelerated
Purchase Date for such Additional Accelerated
Purchase.
(m) “Additional
Accelerated Purchase Price” means, with respect to an
Additional Accelerated Purchase made pursuant to Section 2(d) hereof,
ninety-five percent (95%) of the lower of (i) the VWAP for the
period on the applicable Additional Accelerated Purchase Date,
beginning at the latest of (A) the applicable Accelerated Purchase
Termination Time with respect to the corresponding Accelerated
Purchase referred to in clause (i) of the proviso in the second
sentence of Section
2(d) hereof on such Additional Accelerated Purchase Date,
(B) the applicable Additional Accelerated Purchase Termination Time
with respect to the most recently completed prior Additional
Accelerated Purchase on such Additional Accelerated Purchase Date,
as applicable, and (C) the time at which all Purchase Shares
subject to all prior Accelerated Purchases and Additional
Accelerated Purchases (as applicable), including, without
limitation, those that have been effected on the same Business Day
as the applicable Additional Accelerated Purchase Date with respect
to which the applicable Additional Accelerated Purchase relates,
have theretofore been received by the Investor as DWAC Shares in
accordance with this Agreement (such latest of (i)(A), (i)(B) and
(i)(C) above, the “Additional Accelerated Purchase
Commencement Time”), and ending at the earliest of (X)
4:00 p.m., Eastern time, on such Additional Accelerated Purchase
Date, or such other time publicly announced by the Principal Market
as the official close of trading on the Principal Market on such
Additional Accelerated Purchase Date, (Y) such time, from and after
the Additional Accelerated Purchase Commencement Time for such
Additional Accelerated Purchase, that the total number (or volume)
of shares of Common Stock traded on the Principal Market has
exceeded the applicable Additional Accelerated Purchase Share
Volume Maximum, and (Z) such time, from and after the Additional
Accelerated Purchase Commencement Time for such Additional
Accelerated Purchase, that the Sale Price has fallen below the
applicable Additional Accelerated Purchase Minimum Price Threshold
(such earliest of (i)(X), (i)(Y) and (i)(Z) above, the
“Additional
Accelerated Purchase Termination Time”), and (ii) the
Closing Sale Price of the Common Stock on such Additional
Accelerated Purchase Date (to be appropriately adjusted for any
applicable reorganization, recapitalization, non-cash dividend,
stock split, reverse stock split or other similar
transaction).
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(n) “Additional
Accelerated Purchase Share Amount” means, with respect
to an Additional Accelerated Purchase made pursuant to Section 2(d) hereof, the number
of Purchase Shares directed by the Company to be purchased by the
Investor on an Additional Accelerated Purchase Notice, which number
of Purchase Shares shall not exceed the lesser of (i) 300% of the
number of Purchase Shares directed by the Company to be purchased
by the Investor pursuant to the corresponding Regular Purchase
Notice for the corresponding Regular Purchase referred to in clause
(i) of the proviso in the second sentence of Section 2(d) hereof (such
corresponding Regular Purchase being subject to the Purchase Share
limitations contained in Section 2(b) hereof) and (ii)
an amount equal to (A) the Additional Accelerated Purchase Share
Percentage multiplied by (B) the total number (or volume) of shares
of Common Stock traded on the Principal Market during the period on
the applicable Additional Accelerated Purchase Date beginning at
the Additional Accelerated Purchase Commencement Time for such
Additional Accelerated Purchase and ending at the Additional
Accelerated Purchase Termination Time for such Additional
Accelerated Purchase.
(o) “Additional
Accelerated Purchase Share Percentage” means, with
respect to an Additional Accelerated Purchase made pursuant to
Section 2(d)
hereof, twenty percent (20%).
(p) “Additional
Accelerated Purchase Share Volume Maximum” means, with
respect to an Additional Accelerated Purchase made pursuant to
Section 2(d)
hereof, a number of shares of Common Stock equal to (i) the number
of Purchase Shares specified by the Company in the applicable
Additional Accelerated Purchase Notice as the Additional
Accelerated Purchase Share Amount to be purchased by the Investor
in such Additional Accelerated Purchase, divided by (ii) the
Additional Accelerated Purchase Share Percentage (to be
appropriately adjusted for any applicable reorganization,
recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).
(q) “Alternate
Adjusted Regular Purchase Share Limit” means, with
respect to a Regular Purchase made pursuant to Section 2(b) hereof, the
maximum number of Purchase Shares which, taking into account the
applicable per share Purchase Price therefor calculated in
accordance with this Agreement, would enable the Company to deliver
to the Investor, on the applicable Purchase Date for such Regular
Purchase, a Regular Purchase Notice for a Purchase Amount equal to,
or as closely approximating without exceeding, Fifty Thousand
Dollars ($50,000).
(r)
“Available
Amount” means, initially, Ten Million Two Hundred
Fifty Thousand Dollars ($10,250,000) in the aggregate, which amount
shall be reduced by (i) the Initial Purchase Amount upon the
purchase of the Initial Purchase Shares by the Investor on the date
hereof pursuant to Section
2(a) hereof, (ii) the Tranche Purchase Amount upon the
purchase of the Tranche Purchase Shares by the Investor on the
Commencement Date pursuant to Section 2(a) hereof, and (iii)
the Purchase Amount each time the Investor purchases Purchase
Shares (other than the Initial Purchase Shares and the Tranche
Purchase Shares) pursuant to Section 2 hereof.
(s) “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
(t) “Business
Day” means any day on which the Principal Market is
open for trading, including any day on which the Principal Market
is open for trading for a period of time less than the customary
time.
(u) “Closing
Sale Price” means, for any security as of any date,
the last closing sale price for such security on the Principal
Market as reported by the Principal Market.
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(v)
“Confidential
Information” means any information disclosed by either
party to the other party, either directly or indirectly, in
writing, orally or by inspection of tangible objects (including,
without limitation, documents, prototypes, samples, plant and
equipment), which is designated as "Confidential," "Proprietary" or
some similar designation. Information communicated orally shall be
considered Confidential Information if such information is
confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential
Information may also include information disclosed to a disclosing
party by third parties. Confidential Information shall not,
however, include any information which (i) was publicly known and
made generally available in the public domain prior to the time of
disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party
to the receiving party through no action or inaction of the
receiving party; (iii) is already in the possession of the
receiving party without confidential restriction at the time of
disclosure by the disclosing party as shown by the receiving
party’s files and records immediately prior to the time of
disclosure; (iv) is obtained by the receiving party from a third
party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving
party without use of or reference to the disclosing party’s
Confidential Information, as shown by documents and other competent
evidence in the receiving party’s possession; or (vi) is
required by law to be disclosed by the receiving party, provided
that the receiving party gives the disclosing party prompt written
notice of such requirement prior to such disclosure and assistance
in obtaining an order protecting the information from public
disclosure.
(w) “Custodian”
means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
(x) “DTC”
means The Depository Trust Company, or any successor performing
substantially the same function for the Company.
(y) “DWAC
Shares” means shares of Common Stock that are (i)
issued in electronic form, (ii) freely tradable and transferable
and without restriction on resale and (iii) timely credited by the
Company to the Investor’s or its designee’s specified
Deposit/Withdrawal at Custodian (DWAC) account with DTC under its
Fast Automated Securities Transfer (FAST) Program, or any similar
program hereafter adopted by DTC performing substantially the same
function.
(z) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
(aa) “Floor
Price” means, with respect to a Regular Purchase made
pursuant to Section
2(a) hereof, $0.05, which shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction and, effective upon the
consummation of any such reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction, the Floor Price
shall mean the lower of (i) the adjusted price and (ii)
$0.25.
(bb) “Fully
Adjusted Regular Purchase Share Limit” means, with
respect to any reorganization, recapitalization, non-cash dividend,
stock split or other similar transaction from and after the date of
this Agreement, the Regular Purchase Share Limit (as defined in
Section 2(b)
hereof) in effect on the applicable date of determination, after
giving effect to the full proportionate adjustment thereto made
pursuant to Section
2(b) hereof for or in respect of such reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction.
(cc) “Material
Adverse Effect” means any material adverse effect on
(i) the enforceability of any Transaction Document,
(ii) the results of operations, assets, business or financial
condition of the Company, taken as a whole, other than any material
adverse effect that resulted exclusively from (A) any change
in the United States or foreign economies or securities or
financial markets in general that does not have a disproportionate
effect on the Company, (B) any change that generally affects
the industry in which the Company operates that does not have a
disproportionate effect on the Company, (C) any change arising
in connection with earthquakes, hostilities, acts of war, sabotage
or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or
terrorism or military actions existing as of the date hereof,
(D) any action taken by the Investor, its affiliates or its or
their successors and assigns with respect to the transactions
contemplated by this Agreement, (E) the effect of any change
in applicable laws or accounting rules that does not have a
disproportionate effect on the Company, or (F) any change
resulting from compliance with terms of this Agreement or the
consummation of the transactions contemplated by this Agreement, or
(iii) the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction
Document to be performed as of the date of
determination.
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(dd) “Maturity
Date” means the first day of the month immediately
following the twenty-four (24) month anniversary of the
Commencement Date.
(ee) “PEA
Period” means the period commencing at 9:30 a.m.,
Eastern time, on the fifth (5th) Business Day
immediately prior to the filing of any post-effective amendment to
the Registration Statement (as defined herein) or New Registration
Statement (as such term is defined in the Registration Rights
Agreement), and ending at 9:30 a.m., Eastern time, on the Business
Day immediately following, the effective date of any post-effective
amendment to the Registration Statement (as defined herein) or New
Registration Statement (as such term is defined in the Registration
Rights Agreement).
(ff) “Person”
means an individual or entity including but not limited to any
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
(gg) “Principal
Market” means the OTCQB operated by the OTC Markets
Group, Inc. (or any nationally recognized successor thereto);
provided, however, that in the event the Company’s Common
Stock is ever listed or traded on The Nasdaq Capital Market, The
Nasdaq Global Market, The Nasdaq Global Select Market, the New York
Stock Exchange, the NYSE American, the NYSE Arca, the OTC Bulletin
Board, or the OTCQX operated by the OTC Markets Group, Inc. (or any
nationally recognized successor to any of the foregoing), then the
“Principal Market” shall mean such other market or
exchange on which the Company’s Common Stock is then listed
or traded.
(hh) “Purchase
Amount” means, with respect to the Initial Purchase,
the Tranche Purchase, any Regular Purchase, any Accelerated
Purchase, and any Additional Accelerated Purchase made hereunder,
as applicable, the portion of the Available Amount to be purchased
by the Investor pursuant to Section 2 hereof.
(ii) “Purchase
Date” means, with respect to a Regular Purchase made
pursuant to Section
2(b) hereof, the Business Day on which the Investor
receives, after 4:00 p.m., Eastern time, but prior to 5:00 p.m.,
Eastern time, on such Business Day, a valid Regular Purchase Notice
for such Regular Purchase in accordance with this
Agreement.
(jj) “Purchase
Notice” means a Regular Purchase Notice, an
Accelerated Purchase Notice or an Additional Accelerated Purchase
Notice with respect to any Regular Purchase, Accelerated Purchase
or Additional Accelerated Purchase, respectively.
(kk) “Purchase
Price” means, with respect to a Regular Purchase made
pursuant to Section
2(b) hereof, ninety-five percent (95%) of the lower of: (i)
the lowest Sale Price on the Purchase Date for such Regular
Purchase and (ii) the arithmetic average of the three (3) lowest
Closing Sale Prices for the Common Stock during the fifteen (15)
consecutive Business Days ending on the Business Day immediately
preceding such Purchase Date for such Regular Purchase (in each
case, to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar
transaction that occurs on or after the date of this
Agreement).
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(ll) “Regular
Purchase Notice” means, with respect to a Regular
Purchase pursuant to Section 2(b) hereof, an
irrevocable written notice from the Company to the Investor
directing the Investor to buy a specified number of Purchase Shares
(subject to the Purchase Share limitations contained in
Section 2(b)
hereof) at the applicable Purchase Price for such Regular Purchase
in accordance with this Agreement.
(mm)
“Sale
Price” means any trade price for the shares of Common
Stock on the Principal Market as reported by the Principal
Market.
(nn) “SEC”
means the U.S. Securities and Exchange Commission.
(oo) “Securities”
means, collectively, the Purchase Shares and the Commitment
Shares.
(pp) “Securities
Act” means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC
thereunder.
(qq) “Subsidiary”
means any Person the Company wholly-owns or controls, or in which
the Company, directly or indirectly, owns a majority of the voting
stock or similar voting interest, in each case that would be
disclosable pursuant to Item 601(b)(21) of Regulation S-K
promulgated under the Securities Act.
(rr) “Transaction
Documents” means, collectively, this Agreement and the
schedules and exhibits hereto, the Registration Rights Agreement
and the schedules and exhibits thereto, and each of the other
agreements, documents, certificates and instruments entered into or
furnished by the parties hereto or thereto in connection with the
transactions contemplated hereby and thereby.
(ss)
“Transfer Agent” means
Computershare, X.X. XXX 00000, Xxxxxxx Xxxxxxx, XX 00000-0000, or
such other Person who is then serving as the transfer agent for the
Company in respect of the Common Stock.
(tt) “VWAP”
means in respect of an Accelerated Purchase Date or an Additional
Accelerated Purchase Date, as applicable, the volume weighted
average price of the Common Stock on the Principal Market, as
reported on the Principal Market.
Subject
to the terms and conditions set forth in this Agreement, the
Company has the right to sell to the Investor, and the Investor has
the obligation to purchase from the Company, Purchase Shares as
follows:
(a)
Initial
Purchase and Tranche Purchase.
On the date of this Agreement, upon the satisfaction of the
conditions set forth in Sections 7(I)
and 8(I)
hereof, the Company shall issue and
sell to the Investor and the Investor shall purchase from the
Company (the “Initial
Purchase”) Five Hundred
Thousand (500,000) Purchase Shares (collectively, the
“Initial Purchase
Shares”) for aggregate
consideration of One Hundred Twenty-Five Thousand Dollars
($125,000) (the “Initial Purchase
Amount”). On the
Commencement Date (defined below), the Company shall issue and sell
to the Investor and the Investor shall purchase from the Company
(the “Tranche
Purchase”) Five Hundred
Thousand (500,000) Purchase Shares (collectively, the
“Tranche Purchase
Shares”) for aggregate
consideration of One Hundred Twenty-Five Thousand Dollars
($125,000) (the “Tranche Purchase
Amount”).
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(b)
Commencement of
Regular Sales of Common Stock.
Upon the satisfaction of all of the conditions set forth in
Sections
7(II) and 8(II)
hereof (the “Commencement”
and the date of satisfaction of such conditions the
“Commencement
Date”) and thereafter,
the Company shall have the right, but not the obligation, to direct
the Investor, by its delivery to the Investor of a Regular Purchase
Notice from time to time, to purchase up to Two Hundred Thousand
(200,000) Purchase Shares, subject to adjustment as set forth below
in this Section 2(b)
(such maximum number of Purchase
Shares, as may be adjusted from time to time, the
“Regular Purchase Share
Limit”), at the Purchase
Price on the Purchase Date (each such purchase a
“Regular
Purchase”);
provided,
however,
that (i) the Regular Purchase Share Limit shall be increased to Two
Hundred Fifty Thousand (250,000) Purchase Shares, if the Closing
Sale Price of the Common Stock on the applicable Purchase Date is
not below $0.20, and (ii) the Regular Purchase Share Limit shall be
increased to Five Hundred Thousand (500,000) Purchase Shares, if
the Closing Sale Price of the Common Stock on the applicable
Purchase Date is not below $0.50 (all of which share and dollar
amounts shall be appropriately proportionately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or
other similar transaction; provided
that if, after giving effect to the
full proportionate adjustment to the Regular Purchase Share Limit
therefor, the Fully Adjusted Regular Purchase Share Limit then in
effect would preclude the Company from delivering to the Investor a
Regular Purchase Notice hereunder for a Purchase Amount (calculated
by multiplying (X) the number of Purchase Shares equal to the Fully
Adjusted Regular Purchase Share Limit, by (Y) the Purchase Price
per Purchase Share covered by such Regular Purchase Notice on the
applicable Purchase Date therefor) equal to or greater than Fifty
Thousand Dollars ($50,000), the Regular Purchase Share Limit for
such Regular Purchase Notice shall not be fully adjusted to equal
the applicable Fully Adjusted Regular Purchase Share Limit, but
rather the Regular Purchase Share Limit for such Regular Purchase
Notice shall be adjusted to equal the applicable Alternate Adjusted
Regular Purchase Share Limit as of the applicable Purchase Date for
such Regular Purchase Notice); and provided,
further,
however,
that the Investor’s committed obligation under any single
Regular Purchase, other than any Regular Purchase with respect to
which an Alternate Adjusted Regular Purchase Share Limit shall
apply, shall not exceed Five Hundred Thousand Dollars ($500,000).
If the Company delivers any Regular Purchase Notice for a Purchase
Amount in excess of the limitations contained in the immediately
preceding sentence, such Regular Purchase Notice shall be
void ab
initio to the extent of the
amount by which the number of Purchase Shares set forth in such
Regular Purchase Notice exceeds the number of Purchase Shares which
the Company is permitted to include in such Purchase Notice in
accordance herewith, and the Investor shall have no obligation to
purchase such excess Purchase Shares in respect of such Regular
Purchase Notice; provided,
however,
that the Investor shall remain obligated to purchase the number of
Purchase Shares which the Company is permitted to include in such
Regular Purchase Notice. The Company may deliver a Regular Purchase
Notice to the Investor as often as every Business Day, so long as
(i) the Closing Sale Price of the Common Stock on such Business Day
is not less than the Floor Price and (ii) all Purchase Shares
subject to all prior Regular Purchases have theretofore been
received by the Investor as DWAC Shares in accordance with this
Agreement. Notwithstanding the foregoing, the Company shall not
deliver any Regular Purchase Notices to the Investor during the PEA
Period.
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(c)
Accelerated
Purchases. Subject to the terms
and conditions of this Agreement, from and after the Commencement
Date, in addition to purchases of Purchase Shares as described
in Section 2(a)
and Section 2(b)
above, the Company shall also have the
right, but not the obligation, to direct the Investor, by its
delivery to the Investor of an Accelerated Purchase Notice from
time to time in accordance with this Agreement, to purchase the
applicable Accelerated Purchase Share Amount at the Accelerated
Purchase Price on the Accelerated Purchase Date therefor in
accordance with this Agreement (each such purchase, an
“Accelerated
Purchase”). The Company
may deliver an Accelerated Purchase Notice to the Investor only on
a Purchase Date on which (i) the Company also properly submitted a
Regular Purchase Notice providing for a Regular Purchase of a
number of Purchase Shares not less than the Regular Purchase Share
Limit then in effect on such Purchase Date in accordance with this
Agreement (including, without limitation, giving effect to any
automatic increase to the Regular Purchase Share Limit as a result
of the Closing Sale Price of the Common Stock exceeding certain
thresholds set forth in Section 2(b)
above on such Purchase Date and any
other adjustments to the Regular Purchase Share Limit, in each case
pursuant to Section 2(b)
above), (ii) if all Purchase Shares
subject to all prior Regular Purchases and Accelerated Purchases
and all Additional Accelerated Purchases prior to the Regular
Purchase Date referred to in clause (i) hereof (as applicable) have
theretofore been received by the Investor as DWAC Shares in
accordance with this Agreement, and (iii) the Closing Sale Price of
the Common Stock is not less than the Accelerated Purchase Floor
Price. If the Company delivers any Accelerated Purchase Notice
directing the Investor to purchase an amount of Purchase Shares
that exceeds the Accelerated Purchase Share Amount that the Company
is then permitted to include in such Accelerated Purchase Notice,
such Accelerated Purchase Notice shall be void ab initio to the extent of the amount by which the number of
Purchase Shares set forth in such Accelerated Purchase Notice
exceeds the Accelerated Purchase Share Amount that the Company is
then permitted to include in such Accelerated Purchase Notice
(which shall be confirmed in an Accelerated Purchase Confirmation),
and the Investor shall have no obligation to purchase such excess
Purchase Shares in respect of such Accelerated Purchase
Notice; provided,
however,
that the Investor shall remain obligated to purchase the
Accelerated Purchase Share Amount which the Company is permitted to
include in such Accelerated Purchase Notice. Within one (1)
Business Day after completion of each Accelerated Purchase Date for
an Accelerated Purchase, the Investor shall provide to the Company
a written confirmation of such Accelerated Purchase setting forth
the applicable Accelerated Purchase Share Amount and Accelerated
Purchase Price for such Accelerated Purchase (each, an
“Accelerated Purchase
Confirmation”).
Notwithstanding the foregoing, the Company shall not deliver any
Accelerated Purchase Notices to the Investor during the PEA
Period.
9
(d)
Additional
Accelerated Purchases. Subject
to the terms and conditions of this Agreement, from and after the
Commencement Date, in addition to purchases of Purchase Shares as
described in Section
2(a), Section 2(b)
and Section 2(c)
above, the Company shall also have the
right, but not the obligation, to direct the Investor, by its
timely delivery to the Investor of an Additional Accelerated
Purchase Notice on an Additional Accelerated Purchase Date in
accordance with this Agreement, to purchase the applicable
Additional Accelerated Purchase Share Amount at the applicable
Additional Accelerated Purchase Price therefor in accordance with
this Agreement (each such purchase, an “Additional Accelerated
Purchase”). The Company
may deliver multiple Additional Accelerated Purchase Notices to the
Investor on an Additional Accelerated Purchase Date;
provided,
however,
that the Company may deliver an Additional Accelerated Purchase
Notice to the Investor only (i) on a Business Day that is also the
Accelerated Purchase Date for an Accelerated Purchase with respect
to which the Company properly submitted to the Investor an
Accelerated Purchase Notice in accordance with this Agreement on
the applicable Purchase Date for a Regular Purchase of a number of
Purchase Shares not less than the Regular Purchase Share Limit then
in effect in accordance with this Agreement (including, without
limitation, giving effect to any automatic increase to the Regular
Purchase Share Limit as a result of the Closing Sale Price of the
Common Stock exceeding certain thresholds set forth in
Section
2(b) above on such Purchase
Date and any other adjustments to the Regular Purchase Share Limit,
in each case pursuant to Section 2(b)
above), (ii) if the Closing Sale Price
of the Common Stock on the Business Day immediately preceding the
Business Day on which such Additional Accelerated Purchase Notice
is delivered is not less than the Additional Accelerated Purchase
Floor Price, and (iii) if all Purchase Shares subject to all prior
Regular Purchases, Accelerated Purchases and Additional Accelerated
Purchases, including, without limitation, those that have been
effected on the same Business Day as the applicable Additional
Accelerated Purchase Date with respect to which the applicable
Additional Accelerated Purchase relates, in each case have
theretofore been received by the Investor as DWAC Shares in
accordance with this Agreement. If the Company delivers any
Additional Accelerated Purchase Notice directing the Investor to
purchase an amount of Purchase Shares that exceeds the Additional
Accelerated Purchase Share Amount that the Company is then
permitted to include in such Additional Accelerated Purchase
Notice, such Additional Accelerated Purchase Notice shall be
void ab
initio to the extent of the
amount by which the number of Purchase Shares set forth in such
Additional Accelerated Purchase Notice exceeds the Additional
Accelerated Purchase Share Amount that the Company is then
permitted to include in such Additional Accelerated Purchase Notice
(which shall be confirmed in an Additional Accelerated Purchase
Confirmation), and the Investor shall have no obligation to
purchase such excess Purchase Shares in respect of such Additional
Accelerated Purchase Notice; provided,
however,
that the Investor shall remain obligated to purchase the Additional
Accelerated Purchase Share Amount which the Company is permitted to
include in such Additional Accelerated Purchase Notice. Within one
(1) Business Day after completion of each Additional Accelerated
Purchase Date, the Investor will provide to the Company a written
confirmation of each Additional Accelerated Purchase on such
Additional Accelerated Purchase Date setting forth the applicable
Additional Accelerated Purchase Share Amount and Additional
Accelerated Purchase Price for each such Additional Accelerated
Purchase on such Additional Accelerated Purchase Date (each, an
“Additional Accelerated
Purchase Confirmation”).
Notwithstanding the foregoing, the Company shall not deliver any
Additional Accelerated Purchase Notices to the Investor during the
PEA Period.
(e)
Payment
for Purchase Shares. For the
Initial Purchase, the Tranche Purchase and each Regular Purchase,
the Investor shall pay to the Company an amount equal to the
Purchase Amount with respect to such Regular Purchase, Tranche
Purchase and Initial Purchase, respectively, as full payment for
such Purchase Shares via wire transfer of immediately available
funds on the same Business Day that the Investor receives such
Purchase Shares, if such Purchase Shares are received by the
Investor before 1:00 p.m., Eastern time, or, if such Purchase
Shares are received by the Investor after 1:00 p.m., Eastern time,
the next Business Day. For each Accelerated Purchase and each
Additional Accelerated Purchase, the Investor shall pay to the
Company an amount equal to the Purchase Amount with respect to such
Accelerated Purchase and Additional Accelerated Purchase,
respectively, as full payment for such Purchase Shares via wire
transfer of immediately available funds on the second Business Day
following the date that the Investor receives such Purchase Shares.
If the Company or the Transfer Agent shall fail for any reason or
for no reason to electronically transfer any Purchase Shares as
DWAC Shares in respect of the Tranche Purchase, a Regular Purchase,
an Accelerated Purchase or an Additional Accelerated Purchase (as
applicable) within two (2) Business Days following the receipt by
the Company of the Tranche Purchase Amount, the Purchase Price,
Accelerated Purchase Price and Additional Accelerated Purchase
Price, respectively, therefor in compliance with this
Section
2(e), and if on or after such
Business Day the Investor purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of
a sale by the Investor of such Purchase Shares that the Investor
anticipated receiving from the Company in respect of such Tranche
Purchase, Regular Purchase, Accelerated Purchase or Additional
Accelerated Purchase (as applicable), then the Company shall,
within two (2) Business Days after the Investor’s request,
either (i) pay cash to the Investor in an amount equal to the
Investor’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
(the “Cover
Price”), at which point
the Company’s obligation to deliver such Purchase Shares as
DWAC Shares shall terminate, or (ii) promptly honor its obligation
to deliver to the Investor such Purchase Shares as DWAC Shares and
pay cash to the Investor in an amount equal to the excess (if any)
of the Cover Price over the total Purchase Amount paid by the
Investor pursuant to this Agreement for all of the Purchase Shares
to be purchased by the Investor in connection with such Tranche
Purchase, Regular Purchase, Accelerated Purchase and Additional
Accelerated Purchase (as applicable). The Company shall not issue
any fraction of a share of Common Stock upon the Initial Purchase,
the Tranche Purchase, or any Regular Purchase, Accelerated Purchase
or Additional Accelerated Purchase. If the issuance would result in
the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up or down to
the nearest whole share. All payments made under this Agreement
shall be made in lawful money of the United States of America or
wire transfer of immediately available funds to such account as the
Company may from time to time designate by written notice in
accordance with the provisions of this Agreement. Whenever any
amount expressed to be due by the terms of this Agreement is due on
any day that is not a Business Day, the same shall instead be due
on the next succeeding day that is a Business
Day.
10
The
Investor represents and warrants to the Company that as of the date
hereof and as of the Commencement Date:
(b)
Accredited Investor Status,
Disqualification. The Investor is an “accredited
investor” pursuant to Rule 501 of Regulation D under the
Securities Act of 1933, as amended (the “Securities
Act”), and not
subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act
(a “Disqualification
Event”),
except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3).
11
The
Company represents and warrants to the Investor that, except as set
forth in the disclosure schedules attached hereto or in the SEC
Documents expressly referred to as exceptions or qualifications
with respect to specific representations and warranties of the
Company in this Section 4 (in each case, which exceptions shall be
deemed to be a part of the representations and warranties made
hereunder), as of the date hereof and as of the Commencement
Date:
12
13
14
15
16
17
(u)
DTC Eligibility.
The Company, through the Transfer Agent, currently participates in
the DTC Fast Automated Securities Transfer (FAST) Program and the
Common Stock can be transferred electronically to third parties via
the DTC Fast Automated Securities Transfer (FAST)
Program.
(w) 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 the
Transaction Documents. The Investor 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 4(w) that
may be due in connection with the transactions contemplated by the
Transaction Documents.
18
19
20
(g)
Purchase
Records. The Investor and the
Company shall each maintain records showing the remaining Available
Amount at any given time and the dates and Purchase Amounts for
each Regular Purchase, Accelerated Purchase and Additional
Accelerated Purchase and the Initial Purchase and Tranche Purchase
or shall use such other method, reasonably satisfactory to the
Investor and the Company.
(h)
Taxes. The Company shall pay
any and all transfer, stamp or similar taxes that may be payable
with respect to the issuance and delivery of any shares of Common
Stock to the Investor made under this Agreement.
21
(a)
On the date of this Agreement, the Company shall issue irrevocable
instructions to the Transfer Agent substantially in the form
attached hereto as Exhibit D to
issue the Initial Purchase Shares and the Commitment Shares in
accordance with the terms of this Agreement (the
“Irrevocable
Transfer Agent Instructions”). The certificate(s) or
book-entry statement(s) representing the Initial Purchase Shares
and the Commitment Shares, except as set forth below, shall bear
the following restrictive legend (the “Restrictive
Legend”):
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE
144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION
OF HOLDER’S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS.
22
(b) On the earlier of
(i) the Commencement Date and (ii) such time that the Investor
shall request, provided all conditions of Rule 144 under the
Securities Act are met , the Company shall, no later than one (1)
Business Day following the delivery by the Investor to the Company
or the Transfer Agent of one or more legended certificates or
book-entry statements representing the Initial Purchase Shares
and/or Commitment Shares (which certificates or book-entry
statements the Investor shall promptly deliver on or prior to the
first to occur of the events described in clauses (i) and (ii) of
this sentence), as directed by the Investor, issue and deliver (or
cause to be issued and delivered) to the Investor, as requested by
the Investor, either: (A) a certificate or book-entry statement
representing such Initial Purchase Shares and/or Commitment Shares
that is free from all restrictive and other legends or (B) a number
of shares of Common Stock equal to the number of Initial Purchase
Shares and/or Commitment Shares represented by the certificate(s)
or book-entry statement(s) so delivered by the Investor as DWAC
Shares. The Company shall take all actions necessary or desirable
to carry out the intent and accomplish the purposes of the
immediately preceding sentence, including, without limitation,
delivering all such legal opinions, consents, certificates,
resolutions and instructions to the Transfer Agent, and any
successor transfer agent of the Company, as may be requested from
time to time by the Investor or necessary or desirable to carry out
the intent and accomplish the purposes of the immediately preceding
sentence. On the Commencement Date, the Company shall issue to the
Transfer Agent, and any subsequent transfer agent, (i) irrevocable
instructions in the form substantially similar to those used by the
Investor in substantially similar transactions (the
“Commencement
Irrevocable Transfer Agent Instructions”) and (ii) the
notice of effectiveness of the Registration Statement in the form
attached as an exhibit to the Registration Rights Agreement (the
“Notice of
Effectiveness of Registration Statement”), in each
case to issue the Commitment Shares and the Purchase Shares
(including the Tranche Purchase Shares) in accordance with the
terms of this Agreement and the Registration Rights Agreement. All
Purchase Shares (including the Tranche Purchase Shares) to be
issued from and after Commencement to or for the benefit of the
Investor pursuant to this Agreement shall be issued only as DWAC
Shares. The Company represents and warrants to the Investor that,
while this Agreement is effective, no instruction other than the
Commencement Irrevocable Transfer Agent Instructions and the Notice
of Effectiveness of Registration Statement referred to in this
Section 6(b) will
be given by the Company to the Transfer Agent with respect to the
Purchase Shares or the Commitment Shares from and after
Commencement, and the Purchase Shares and the Commitment Shares
covered by the Registration Statement shall otherwise be freely
transferable on the books and records of the Company. If the
Investor effects a sale, assignment or transfer of the Purchase
Shares, the Company shall permit the transfer and shall promptly
instruct the Transfer Agent (and any subsequent transfer agent) to
issue DWAC Shares in such name and in such denominations as
specified by the Investor to effect such sale, transfer or
assignment. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Investor.
Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 6 will be inadequate
and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 6, that the Investor
shall be entitled, in addition to all other available remedies, to
an order and/or injunction restraining any breach and requiring
immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being
required. The Company agrees that if the Company fails to fully
comply with the provisions of this Section 6(b) within five (5)
Business Days of the Investor providing the deliveries referred to
above, the Company shall, at the Investor’s written
instruction, purchase such shares of Common Stock containing the
restrictive legend from the Investor at the greater of the (i)
purchase price paid for such shares of Common Stock (as applicable)
and (ii) the Closing Sale Price of the Common Stock on the date of
the Investor’s written instruction.
7.
CONDITIONS
TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON
STOCK.
I. The
right of the Company hereunder to sell the Initial Purchase Shares
on the date of this Agreement is subject to the satisfaction of
each of the following conditions:
(a) The
Investor shall have executed each of the Transaction Documents and
delivered the same to the Company; and
(b) The
representations and warranties of the Investor shall be true and
correct in all material respects as of the date
hereof.
II. The
right of the Company hereunder to commence sales of the Purchase
Shares (other than the Initial Purchase Shares), including the
Tranche Purchase Shares, on the Commencement Date is subject to the
satisfaction of each of the following conditions:
(a) The
Investor shall have executed each of the Transaction Documents and
delivered the same to the Company;
(b) The
Registration Statement covering the resale of the Purchase Shares
(including, without limitation, all of the Initial Purchase Shares
and Tranche Purchase Shares) and all of the Commitment Shares shall
have been declared effective under the Securities Act by the SEC,
and no stop order with respect to the Registration Statement shall
be pending or threatened by the SEC; and
23
(c) The
representations and warranties of the Investor shall be true and
correct in all material respects as of the date hereof and as of
the Commencement Date as though made at that time.
I. The
obligation of the Investor to buy the Initial Purchase Shares under
this Agreement is subject to the satisfaction of each of the
following conditions:
(a)
The Company shall have executed each of the Transaction Documents
and delivered the same to the Investor;
(b)
The
Common Stock shall be listed or quoted on the Principal Market,
trading in the Common Stock shall not have been within the last 365
days suspended by the SEC or the Principal Market, and all
Securities to be issued by the Company to the Investor pursuant to
this Agreement shall have been, if applicable, approved for listing
or quotation on the Principal Market in accordance with the
applicable rules and regulations of the Principal Market, subject
only to official notice of issuance;
(c) The representations
and warranties of the Company contained in Section 4 shall be true and
correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section
4 above, in which case, such representations and warranties
shall be true and correct without further qualification) as of the
date hereof (except for representations and warranties that speak
as of a specific date, which shall be true and correct in all
material respects as of such specific date, or to the extent
already qualified as to materiality in Section 4 above shall be true
and correct in all respects as of such specific date) and the
Company shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the
Company at or prior to the date hereof. The Investor shall have
received a certificate, executed by the Chief Executive Officer
(“CEO”), President or Chief
Financial Officer (“CFO”) of the Company,
dated as of the date hereof, to the foregoing effect in the form
attached hereto as Exhibit
A;
(d) The
Board of Directors of the Company shall have adopted the Signing
Resolutions in substantially the form attached hereto as
Exhibit
B which shall be in full force and effect without any
amendment or supplement thereto as of the Commencement
Date;
(e) The
Irrevocable Transfer Agent Instructions shall have been delivered
by the Company to the Transfer Agent (or any successor transfer
agent) and acknowledged in writing (including by email) by the
Transfer Agent (or any successor transfer agent);
(f) All
federal, state and local governmental laws, rules and regulations
applicable to the transactions contemplated by the Transaction
Documents and necessary for the execution, delivery and performance
of the Transaction Documents and the consummation of the
transactions contemplated thereby in accordance with the terms
thereof shall have been complied with, and all consents,
authorizations and orders of, and all filings and registrations
with, all federal, state and local courts or governmental agencies
and all federal, state and local regulatory or self-regulatory
agencies necessary for the execution, delivery and performance of
the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall
have been obtained or made, including, without limitation, in each
case those required under the Securities Act, the Exchange Act,
applicable state securities or “Blue Sky” laws or
applicable rules and regulations of the Principal Market, or
otherwise required by the SEC, the Principal Market or any state
securities regulators;
24
(g) No
statute, regulation, order, decree, writ, ruling or injunction
shall have been enacted, entered, promulgated, threatened or
endorsed by any federal, state or local court or governmental
authority of competent jurisdiction which prohibits the
consummation of or which would materially modify or delay any of
the transactions contemplated by the Transaction Documents;
and
(h) No
action, suit or proceeding before any federal, state, local or
foreign arbitrator or any court or governmental authority of
competent jurisdiction shall have been commenced or threatened, and
no inquiry or investigation by any federal, state, local or foreign
governmental authority of competent jurisdiction shall have been
commenced or threatened, against the Company, or any of the
officers, directors or affiliates of the Company, seeking to
restrain, prevent or change the transactions contemplated by the
Transaction Documents, or seeking material damages in connection
with such transactions.
II. The
obligation of the Investor to buy Purchase Shares (other than the
Initial Purchase Shares), including the Tranche Purchase Shares,
under this Agreement is subject to the satisfaction of each of the
following conditions on or prior to the Commencement Date and, once
such conditions have been initially satisfied, there shall not be
any ongoing obligation to satisfy such conditions after the
Commencement has occurred:
(a) The
Company shall have executed each of the Transaction Documents and
delivered the same to the Investor;
(b)
The Company shall have issued or caused to be issued to the
Investor (i) one or more certificates or book-entry statements
representing the Initial Purchase Shares and the Commitment Shares
free from all restrictive and other legends or (ii) a number of
shares of Common Stock equal to the number of Initial Purchase
Shares and Commitment Shares as DWAC Shares, in each case in
accordance with Section
6(b);
(c) The
Common Stock shall be listed or quoted on the Principal Market,
trading in the Common Stock shall not have been within the last 365
days suspended by the SEC or the Principal Market, and all
Securities to be issued by the Company to the Investor pursuant to
this Agreement shall have been, if applicable, approved for listing
or quotation on the Principal Market in accordance with the
applicable rules and regulations of the Principal Market, subject
only to official notice of issuance;
(d) The
Investor shall have received the opinions and negative assurances
of the Company's legal counsel dated as of the Commencement Date
substantially in the form heretofore agreed by the parties
hereto;
(e) The
representations and warranties of the Company contained in
Section 4 shall be
true and correct in all material respects (except to the extent
that any of such representations and warranties is already
qualified as to materiality in Section 4 above, in which case, such
representations and warranties shall be true and correct without
further qualification) as of the date hereof and as of the
Commencement Date as though made at that time (except for
representations and warranties that speak as of a specific date,
which shall be true and correct in all material respects as of such
specific date, or to the extent already qualified as to materiality
in Section 4 above shall be true and correct in all respects as of
such specific date) and the Company shall have performed, satisfied
and complied with the covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement Date. The
Investor shall have received a certificate, executed by the CEO,
President or CFO of the Company, dated as of the Commencement Date,
to the foregoing effect in the form attached hereto as Exhibit
A;
25
(f) The
Board of Directors of the Company shall have adopted the Signing
Resolutions in substantially the form attached hereto as
Exhibit
B which shall be in full force and effect without any
amendment or supplement thereto as of the Commencement
Date;
(g) As
of the Commencement Date, the Company shall have reserved out of
its authorized and unissued Common Stock, solely for the purpose of
effecting purchases of Purchase Shares (including the Initial
Purchase Shares and the Tranche Purchase Shares), hereunder,
8,000,000 shares of Common Stock;
(h) The
Commencement Irrevocable Transfer Agent Instructions and the Notice
of Effectiveness of Registration Statement each shall have been
delivered to the Transfer Agent (or any successor transfer agent)
and acknowledged in writing (including by email) by the Transfer
Agent (or any successor transfer agent);
(i) The
Company shall have delivered to the Investor a certificate
evidencing the incorporation and good standing of the Company in
the State of New York issued by the Department of State of the
State of New York as of a date within ten (10) Business Days of the
Commencement Date;
(j) The
Company shall have delivered to the Investor a certified copy of
the Certificate of Incorporation as certified by the Department of
State of the State of New York within ten (10) Business Days of the
Commencement Date;
(k) The
Company shall have delivered to the Investor a secretary's
certificate executed by the Secretary of the Company, dated as of
the Commencement Date, in the form attached hereto as Exhibit
C;
(l) The
Registration Statement covering the resale of the Purchase Shares
(including, without limitation, all of the Initial Purchase Shares
and Tranche Purchase Shares) and all of the Commitment Shares shall
have been declared effective under the Securities Act by the SEC,
and no stop order with respect to the Registration Statement shall
be in effect or threatened by the SEC. The Company shall have
prepared and filed with the SEC, not later than one (1) Business
Day after the effective date of the Registration Statement, a final
and complete prospectus (the preliminary form of which shall be
included in the Registration Statement) and shall have delivered to
the Investor a true and complete copy thereof. Such prospectus
shall be current and available for the resale by the Investor of
all of the Securities covered thereby. The Current Report shall
have been filed with the SEC, as required pursuant to Section 5(a). All reports,
schedules, registrations, forms, statements, information and other
documents required to have been filed by the Company with the SEC
at or during the 12-month period immediately preceding the
Commencement Date pursuant to the reporting requirements of the
Exchange Act shall have been filed with the SEC within the
applicable time periods prescribed for such filings under the
Exchange Act, including any applicable extension periods
contemplated by the Exchange Act;
(m) No
Event of Default (as defined below) has occurred, and no event
which, after notice and/or lapse of time, would reasonably be
expected to become an Event of Default has occurred;
(n) All
federal, state and local governmental laws, rules and regulations
applicable to the transactions contemplated by the Transaction
Documents and necessary for the execution, delivery and performance
of the Transaction Documents and the consummation of the
transactions contemplated thereby in accordance with the terms
thereof shall have been complied with, and all consents,
authorizations and orders of, and all filings and registrations
with, all federal, state and local courts or governmental agencies
and all federal, state and local regulatory or self-regulatory
agencies necessary for the execution, delivery and performance of
the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall
have been obtained or made, including, without limitation, in each
case those required under the Securities Act, the Exchange Act,
applicable state securities or “Blue Sky” laws or
applicable rules and regulations of the Principal Market, or
otherwise required by the SEC, the Principal Market or any state
securities regulators;
26
(o) No
statute, regulation, order, decree, writ, ruling or injunction
shall have been enacted, entered, promulgated, threatened or
endorsed by any federal, state or local court or governmental
authority of competent jurisdiction which prohibits the
consummation of or which would materially modify or delay any of
the transactions contemplated by the Transaction Documents;
and
(p) No
action, suit or proceeding before any federal, state, local or
foreign arbitrator or any court or governmental authority of
competent jurisdiction shall have been commenced or threatened, and
no inquiry or investigation by any federal, state, local or foreign
governmental authority of competent jurisdiction shall have been
commenced or threatened, against the Company, or any of the
officers, directors or affiliates of the Company, seeking to
restrain, prevent or change the transactions contemplated by the
Transaction Documents, or seeking material damages in connection
with such transactions.
In
consideration of the Investor's execution and delivery of the
Transaction Documents and acquiring the Securities hereunder and in
addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless the Investor and all of its affiliates,
stockholders, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Person's agents or
other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this
Agreement) (collectively, the "Indemnitees") from and against
any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee
is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements
(the "Indemnified
Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by the Company in the
Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents or any
other certificate, instrument or document contemplated hereby or
thereby, other than, in the case of clause (c), with respect to
Indemnified Liabilities which directly and primarily result from
the fraud, gross negligence or willful misconduct of an Indemnitee.
The indemnity in this Section 9 shall not apply to amounts paid in
settlement of any claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be
unreasonably withheld, conditioned or delayed. To the extent that
the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law. Payment under this
indemnification shall be made within thirty (30) days from the date
Investor makes written request for it. A certificate containing
reasonable detail as to the amount of such indemnification
submitted to the Company by Investor shall be conclusive evidence,
absent manifest error, of the amount due from the Company to
Investor. If any action shall be brought against any Indemnitee in
respect of which indemnity may be sought pursuant to this
Agreement, such Indemnitee shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense
thereof with counsel of its own choosing reasonably acceptable to
the Indemnitee. Any Indemnitee shall have the right to employ
separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnitee, except to the extent that (i) the
employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or
(iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue
between the position of the Company and the position of such
Indemnitee, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate
counsel.
27
An
"Event of Default"
shall be deemed to have occurred at any time as any of the
following events occurs:
(a) the
effectiveness of a registration statement registering the resale of
the Securities lapses for any reason (including, without
limitation, the issuance of a stop order or similar order) or such
registration statement (or the prospectus forming a part thereof)
is unavailable to the Investor for resale of any or all of the
Securities to be issued to the Investor under the Transaction
Documents, and such lapse or unavailability continues for a period
of ten (10) consecutive Business Days or for more than an aggregate
of thirty (30) Business Days in any 365-day period, but excluding a
lapse or unavailability where (i) the Company terminates a
registration statement after the Investor has confirmed in writing
that all of the Securities covered thereby have been resold or (ii)
the Company supersedes one registration statement with another
registration statement, including (without limitation) by
terminating a prior registration statement when it is effectively
replaced with a new registration statement covering Securities
(provided in the case of this clause (ii) that all of the
Securities covered by the superseded (or terminated) registration
statement that have not theretofore been resold are included in the
superseding (or new) registration statement);
(b) the
suspension of the Common Stock from trading on the Principal Market
for a period of one (1) Business Day, provided that the Company may
not direct the Investor to purchase any shares of Common Stock
during any such suspension;
(c) the
delisting of the Common Stock from OTC Markets (or nationally
recognized successor to the foregoing), provided, however, that the
Common Stock is not immediately thereafter trading on the New York
Stock Exchange, The Nasdaq Capital Market, The Nasdaq Global
Market, The Nasdaq Global Select Market, the NYSE American, the
NYSE Arca, or the OTC Bulletin Board (or nationally recognized
successor to any of the foregoing);
(d) the
failure for any reason by the Transfer Agent to issue Purchase
Shares to the Investor within two (2) Business Days after the date
on which the Investor is entitled to receive such Purchase Shares
under this Agreement;
(e) the
Company breaches any representation, warranty, covenant or other
term or condition under any Transaction Document if such breach
would reasonably be expected to have a Material Adverse Effect and
except, in the case of a breach of a covenant which is reasonably
curable, only if such breach continues for a period of at least
five (5) Business Days;
(f) if
any Person commences a proceeding against the Company pursuant to
or within the meaning of any Bankruptcy Law;
28
(g) if
the Company, pursuant to or within the meaning of any Bankruptcy
Law, (i) commences a voluntary case, (ii) consents to the entry of
an order for relief against it in an involuntary case, (iii)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (iv) makes a general
assignment for the benefit of its creditors or is generally unable
to pay its debts as the same become due;
(h) a
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company or for
all or substantially all of its property, or (iii) orders the
liquidation of the Company; or
(i) if
at any time the Company is not eligible to transfer its Common
Stock electronically as DWAC Shares.
In
addition to any other rights and remedies under applicable law and
this Agreement, so long as an Event of Default has occurred and is
continuing, or if any event which, after notice and/or lapse of
time, would reasonably be expected to become an Event of Default,
has occurred and is continuing, the Company shall not deliver to
the Investor any Regular Purchase Notice, Accelerated Purchase
Notice or Additional Accelerated Purchase Notice.
This
Agreement may be terminated only as follows:
(a) If
pursuant to or within the meaning of any Bankruptcy Law, the
Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the
Company or for all or substantially all of its property, or the
Company makes a general assignment for the benefit of its creditors
(any of which would be an Event of Default as described in
Sections 10(f),
10(g) and
10(h) hereof), this
Agreement shall automatically terminate without any liability or
payment to the Company (except as set forth below) without further
action or notice by any Person.
(b) In
the event that (i) the Company fails to file the Registration
Statement with the SEC within the period specified in Section 5(a) hereof in
accordance with the terms of the Registration Rights Agreement or
(ii) the Commencement shall not have occurred on or before January
31, 2021, due to the failure to satisfy the conditions set forth in
Sections 7(II) and
8(II) above with
respect to the Commencement, then, in the case of clause (i) above,
this Agreement may be terminated by the Investor at any time prior
to the filing of the Registration Statement and, in the case of
clause (ii) above, this Agreement may be terminated by either party
at the close of business on January 31, 2021 or thereafter, in each
case without liability of such party to the other party (except as
set forth below); provided, however, that the right to terminate
this Agreement under this Section 11(b) shall not be
available to any party if such party is then in breach of any
covenant or agreement contained in this Agreement or any
representation or warranty of such party contained in this
Agreement fails to be true and correct such that the conditions set
forth in Section
7(II)(c) or Section
8(II)(e), as applicable, could not then be
satisfied.
(c)
At any time after the Commencement Date, the Company shall have the
option to terminate this Agreement for any reason or for no reason
by delivering notice (a “Company Termination
Notice”) to the Investor electing to terminate this
Agreement without any liability whatsoever of any party to any
other party under this Agreement (except as set forth below). The
Company Termination Notice shall not be effective until one (1)
Business Day after it has been received by the
Investor.
(d) This
Agreement shall automatically terminate on the date that the
Company sells and the Investor purchases the full Available Amount
as provided herein, without any action or notice on the part of any
party and without any liability whatsoever of any party to any
other party under this Agreement (except as set forth
below).
29
(e) If,
for any reason or for no reason, the full Available Amount has not
been purchased in accordance with Section 2 of this
Agreement by the Maturity Date, this Agreement shall automatically
terminate on the Maturity Date, without any action or notice on the
part of any party and without any liability whatsoever of any party
to any other party under this Agreement (except as set forth
below).
Except
as set forth in Sections
11(a) (in respect of an Event of Default under Sections 10(f), 10(g) and 10(h)), 11(d) and 11(e), any termination of this
Agreement pursuant to this Section 11 shall be effected by
written notice from the Company to the Investor, or the Investor to
the Company, as the case may be, setting forth the basis for the
termination hereof. The representations and warranties and
covenants of the Company and the Investor contained in Sections 3, 4, 5, and 6 hereof, the indemnification
provisions set forth in Section 9 hereof and the
agreements and covenants set forth in Sections 10,
11 and 12 shall survive the execution
and delivery of this Agreement and any termination of this
Agreement. No termination of this Agreement shall (i) affect the
Company’s or the Investor’s rights or obligations under
(A) this Agreement with respect to the Initial Purchase or any
pending Tranche Purchase, Regular Purchases, Accelerated Purchases
or Additional Accelerated Purchases and the Company and the
Investor shall complete their respective obligations with respect
to the Initial Purchase and any pending Tranche Purchase, Regular
Purchases, Accelerated Purchases and Additional Accelerated
Purchases under this Agreement and (B) the Registration Rights
Agreement, which shall survive any such termination, or (ii) be
deemed to release the Company or the Investor from any liability
for intentional misrepresentation or willful breach of any of the
Transaction Documents.
(a) Governing
Law; Jurisdiction; Jury Trial. The corporate laws of the
State of New York shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and
interpretation of this Agreement, the Registration Rights Agreement
and the other Transaction Documents shall be governed by the
internal laws of the State of Illinois, without giving effect to
any choice of law or conflict of law provision or rule (whether of
the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the
State of Illinois. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in
the State of Illinois, County of Xxxx, for the adjudication of any
dispute hereunder or under the other Transaction Documents or in
connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, 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 brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party 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 to
such party at the address for such 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
30
If to
the Company:
American Bio Medica
Corporation
000
Xxxxx Xxxx
Xxxxxxxxxx, XX
00000
Telephone:
(000) 000-0000
E-mail:
xxxxxxxxxxxx@xxxx.xxx
With a
copy to (which shall not constitute notice or service of
process):
Xxxxxx
Frome Wolosky LLP
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Email:
xxxxxxxx@xxxxxxxxx.xxx
Attention: Xxxxxxx X. Xxxxxxx,
Esq.
31
If to
the Investor:
Lincoln
Park Capital Fund, LLC
000
Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX
00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
E-mail:
xxxxxxxxxxx@xxxxxxxx.xxx/xxxxx@xxxxxxxx.xxx
Attention:
Xxxx Xxxxxxxxxx/Xxxxxxxx Xxxx
With a
copy to (which shall not constitute notice or service of
process):
Xxxxxx
& Whitney LLP
00 Xxxx
00xx
Xxxxxx
Xxx
Xxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
E-mail:
xxxxxxx.xxxxxxx@xxxxxx.xxx
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
If to
the Transfer Agent:
Computershare
X.X.
XXX 00000
Xxxxxxx
Xxxxxxx, XX 00000-0000
Telephone:
(000) 000-0000
Email:
xxxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
Attention:
Xxxxxxx Xxxxxxx
or at
such other address and/or facsimile number and/or email address
and/or to the attention of such other Person as the recipient party
has specified by written notice given to each other party three (3)
Business Days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice,
consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine or email account
containing the time, date, and recipient facsimile number or email
address, as applicable, or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of
personal service, receipt by facsimile or email or receipt from a
nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.
32
(n)
Enforcement Costs.
If: (i) this Agreement is placed by the Investor in the hands of an
attorney for enforcement or is enforced by the Investor through any
legal proceeding; (ii) an attorney is retained to represent the
Investor in any bankruptcy, reorganization, receivership or other
proceedings affecting creditors' rights and involving a claim under
this Agreement; or (iii) an attorney is retained to represent the
Investor in any other proceedings whatsoever in connection with
this Agreement, then the Company shall pay to the Investor, as
incurred by the Investor, all reasonable costs and expenses
including attorneys' fees incurred in connection therewith, in
addition to all other amounts due hereunder. If this Agreement is
placed by the Company in the hands of an attorney for enforcement
or is enforced by the Company through any legal proceeding, then
the Investor shall pay to the Company, as incurred by the Company,
all reasonable costs and expenses including attorneys' fees
incurred in connection therewith, in addition to all other amounts
due hereunder.
(o)
Amendment and Waiver;
Failure or Indulgence Not Waiver. No provision of this
Agreement may be amended or waived by the parties from and after
the date that is one (1) Business Day immediately preceding the
initial filing of the Registration Statement with the SEC. Subject
to the immediately preceding sentence, (i) no provision of this
Agreement may be amended other than by a written instrument signed
by both parties hereto and (ii) no provision of this Agreement may
be waived other than in a written instrument signed by the party
against whom enforcement of such waiver is sought. No failure or
delay in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or
privilege.
* * * * *
33
IN WITNESS WHEREOF, the Investor and the
Company have caused this Agreement to be duly executed as of the
date first written above.
THE COMPANY:
AMERICAN
BIO MEDICA CORPORATION
By:__/s/ Xxxxxxx X.
Waterhouse________
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
Chief Executive Officer
INVESTOR:
LINCOLN
PARK CAPITAL FUND, LLC
BY:
LINCOLN PARK CAPITAL, LLC
BY:
XXXX XXXX INVESTORS, INC.
By:_/s/ Xxxxxxxx
Cope_______________
Name:
Xxxxxxxx Xxxx
Title:
President
34