FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.13
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT, dated as of July __, 2008 (this "Agreement"), is
made by and between AMERICAN BIO MEDICA CORPORATION, a New York corporation (the
"Company"), and the person or entity named on the signature page hereto (the
"Buyer").
WITNESSETH:
WHEREAS,
upon the terms and subject to the conditions of the Securities Purchase
Agreement, dated as of July __, 2008, between the Buyer and the Company (the
"Securities Purchase Agreement"), the Company has agreed to issue and sell to
the Buyer one or more 10% Convertible Debentures, Series A of the Company, in an
aggregate principal amount not exceeding $750,000 (collectively, the
"Debentures"), which Debentures will be convertible into shares of the common
stock, $0.01 par value (the "Common Stock"), of the Company (the "Conversion
Shares") upon the terms and subject to the conditions of such Debentures;
and
WHEREAS,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities Act"), with respect
to the Conversion Shares; and
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Buyer hereby agree as
follows:
1. Definitions.
a. As
used in this Agreement, the following terms shall have the following
meanings:
i. "Buyer"
means the Buyer and any permitted transferee or assignee of the Buyer that
agrees to become bound by the provisions of this Agreement in accordance with
Section 9 hereof, and “Buyers” means all of the foregoing as a
group.
ii. "Register,"
"Registered," and "Registration" refer to a registration effected by preparing
and filing a Registration Statement or Statements in compliance with the
Securities Act and pursuant to Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such Registration
Statement by the United States Securities and Exchange Commission (the
"SEC").
iii. "Potential
Material Event" means any of the following: (a) the possession by the Company of
material information not ripe for disclosure in a registration statement, which
shall be evidenced by determinations in good faith by the Board of Directors of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company; or (b) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information.
iv. "Registrable
Securities" means the Conversion Shares and up to 150,000 shares of Common Stock
issuable under warrants to be issued to Xxxxxxx Research, Inc., as placement
agent fee for the Debentures.
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v. "Registration
Statement" means a registration statement of the Company under the Securities
Act.
b. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement.
2. Registration.
a. Mandatory
Registration. The Company shall use commercially reasonable efforts to prepare
and file with the SEC, no later than eight (8) months following the completion
of the Series A Debenture offering, an effective Registration Statement on Form
S-3 registering not less than the aggregate number of Registrable
Securities.
b. Minimum
Sale Requirement. The Company shall have no obligation to prepare a Registration
Statement on Form S-3 for filing with the SEC unless the gross proceeds of the
Series A Debentures offering exceed $250,000. If the minimum sale requirement is
met under the Series A offering and the Company elects to undertake the Series B
offering, the Registration Statement on Form S-3 shall register the aggregate
number of Registrable Securities under the Series A Debenture offering and the
Series B Debenture offering.
3. Obligations
of the Company. In connection with the registration of the
Registrable Securities, the Company shall do each of the following.
a. Use
commercially reasonable efforts to prepare and file with the SEC a Registration
Statement with respect to not less than the number of Registrable Securities
provided in Section 2(a), above, and thereafter use its reasonable best efforts
to cause such Registration Statement relating to Registrable Securities to
become effective the earlier of (a) 5 days after notice by the SEC that it may
be declared effective, and keep the Registration Statement effective at all
times until the earliest (the "Registration Period") of (i) the date that is
four (4) years after the date of the Series A Completion Date (ii) the date when
the Buyers may sell all Registrable Securities under Rule 144 or (iii) the date
no Buyer any longer owns any of the Registrable Securities, which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading;
b. Prepare
and file with the SEC such amendments (including post-effective amendments) and
the prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
c. Furnish
to each Buyer whose Registrable Securities are included in the Registration
Statement and such Buyer’s legal counsel identified to the Company, (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement and each
amendment thereto, and (ii) such number of copies of a prospectus, and all
amendments thereto and such other documents, as such Buyer may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Buyer;
d. As
promptly as practicable after becoming aware of such event, notify each Buyer of
the happening of any event of which the Company has knowledge, as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
use its best efforts promptly to prepare an amendment to the Registration
Statement or other appropriate filing with the SEC to correct such untrue
statement or omission, and deliver a number of copies of such supplement or
amendment to each Buyer as such Buyer may reasonably request;
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e. As
promptly as practicable after becoming aware of such event, notify each Buyer
who holds Registrable Securities being sold of the issuance by the SEC of a
notice of effectiveness or any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest possible
time;
f. Notwithstanding
the foregoing, if at any time or from time to time after the date of
effectiveness of the Registration Statement, the Company notifies the Buyers in
writing of the existence of a Potential Material Event, no Buyer shall offer or
sell any Registrable Securities, or engage in any other transaction involving or
relating to the Registrable Securities, from the time of the giving of notice
with respect to a Potential Material Event until such Buyer receives written
notice from the Company that such Potential Material Event either has been
disclosed to the public or no longer constitutes a Potential Material Event;
provided, however, that the Company may not so suspend the right of any Buyer
for more than two twenty (20) day periods in the aggregate during any 12-month
period ("Suspension Period") with at least a ten (10) business day interval
between such periods, during the periods the Registration Statement is required
to be in effect;
g. Provide
a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than the effective date of the Registration
Statement;
h. Cooperate
with the Buyers who hold Registrable Securities being offered to facilitate the
timely preparation and delivery of certificates for the Registrable Securities
to be offered pursuant to the Registration Statement and enable such
certificates for the Registrable Securities to be in such denominations or
amounts as the case may be, as the Buyers may reasonably request, and, within
three (3) business days after a Registration Statement which includes
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to the Buyers
whose Registrable Securities are included in such Registration Statement) an
appropriate instruction and opinion of such counsel; and
i. Take
all other reasonable actions necessary to expedite and facilitate disposition by
the Buyer of the Registrable Securities pursuant to the Registration
Statement.
4. Obligations
of the Buyers. In connection with the registration of the Registrable
Securities, the Buyers shall have the following obligations:
a. It
shall be a condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Buyer that such Buyer shall furnish to the Company
such information regarding itself, the Registrable Securities held by it, and
the intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least five (5) days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify
each Buyer of the information the Company requires from each such Buyer (the
"Requested Information") if such Buyer elects to have any of such Buyer's
Registrable Securities included in the Registration Statement.
b. Each
Buyer by such Buyer's acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statement hereunder, unless
such Buyer has notified the Company in writing of such Buyer's election to
exclude all of such Buyer's Registrable Securities from the Registration
Statement; and
c. Each
Buyer agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3(d) or 3(e), above, such Buyer
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
Buyer's receipt of the copies of the amended prospectus contemplated by Section
3(d) or 3(e) and, if so directed by the Company, such Buyer shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Buyer's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
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5. Expenses
of Registration. All expenses, other than underwriting discounts and commissions
incurred in connection with registrations, filings or qualifications pursuant to
Section 3, but including, without limitation, all registration, listing, and
qualifications fees, printers and accounting fees, the fees and disbursements of
counsel for the Company, shall be borne by the Company.
6. Indemnification. In
the event any Registrable Securities are included in a Registration Statement
under this Agreement:
a. To
the extent permitted by law, the Company will indemnify and hold harmless each
Buyer who holds such Registrable Securities, the directors, if any, of such
Buyer, the officers, if any, of such Buyer, each person, if any, who controls
any Buyer within the meaning of the Securities Act or the Exchange Act (each, an
"Indemnified Party", against any losses, claims, damages, liabilities or
expenses (joint or several) (including reasonable attorneys fees) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the final prospectus (as
amended, if the Company files any amendment thereof with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to clause (b) of this
Section 6, the Company shall reimburse the Buyers, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (I) apply to
a Claim by any Indemnified Party arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of such Indemnified Party expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof, (II) be available to an Indemnified Party to the extent such
Claim is based on a failure of such Indemnified Party to deliver or cause to be
delivered the prospectus made available by the Company; or (III) 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. Each Buyer will indemnify the Company and its officers,
directors and agents against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company, by or on behalf of such Buyer, expressly for use in
connection with the preparation of the Registration Statement, subject to such
limitations and conditions as are applicable to the Indemnification provided by
the Company to this Section 6. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9;
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b. Promptly
after receipt by an Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action), such Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Party, as the case may be. In case any
such action is brought against any Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the indemnifying
party to such Indemnified Party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such Indemnified Party
under this Section 6 for any legal or other reasonable out-of-pocket expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation, unless the indemnifying
party shall not pursue the action of its final conclusion. The Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and reasonable out-of-pocket
expenses of such counsel shall not be at the expense of the indemnifying party
if the indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the Indemnified Party or Indemnified Party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Party under this Section 6, except to
the extent that the indemnifying party is prejudiced in its ability to defend
such action. The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as such expense, loss, damage or liability is incurred and is due
and payable.
7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that (a) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6; (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation; and (c) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable
Securities.
8. Reports
under Exchange Act. With a view to making available to the Buyers the benefits
of Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Buyers to sell securities
of the Company to the public without registration ("Rule 144"), the Company
agrees to:
a. make
and keep public information available, as those terms are understood and defined
in Rule 144;
b. file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
c. furnish
to each Buyer so long as such Buyer owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Buyers to sell such
securities pursuant to Rule 144 without registration.
9. Assignment
of the Registration Rights. The rights to have the Company register Registrable
Securities pursuant to this Agreement shall be automatically assigned by the
Buyers to any transferee of the Registrable Securities (or all or any portion of
any Debenture which is convertible into such securities) only if: (a) the Buyer
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws, and (d) at or before the time the
Company received the written notice contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such
delay.
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10. Amendment
of Registration Rights. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Buyers who hold an eighty (80%) percent interest of the Registrable
Securities of all Buyers. Any amendment or waiver affected in
accordance with this Section 10 shall be binding upon each Buyer and the
Company.
11. Miscellaneous.
a. A
person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.
b. Notices
required or permitted to be given hereunder shall be in writing and shall be
deemed to be sufficiently given when personally delivered (by hand, by courier,
by facsimile transmission or electronic messaging, receipt confirmed, or other
means) or sent by certified mail, return receipt requested, properly addressed
and with proper postage pre-paid (i) if to the Company, AMERICAN BIO MEDICA
CORPORATION, 000 Xxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000, ATTN: Corporate
Secretary, Facsimile Number: 000-000-0000 or email: xxxxxxxxxxxx@xxxx.xxx; with
a copy to Xxxxx & Xxxxxx, LLP, 00 X. Xxxxx Xxxxxx, Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq. Facsimile Number: 518-432-3123; (ii) if to
the Buyer, at the address set forth under its name in the Securities Purchase
Agreement, (iii) or at such other address as each such party furnishes by notice
given in accordance with this Section 11(b), and shall be effective, when
personally delivered, sent via facsimile or electronic messaging (receipt
confirmed), upon receipt and, when so sent by certified mail, four (4) calendar
days after deposit with the United States Postal Service.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
d. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of Albany or the
state courts of the State of New York sitting in the City of Albany in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement may be amended only by an instrument
in writing signed by the party to be charged with enforcement. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
e. This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
f. Subject
to the requirements of Section 9 hereof, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto.
g. Neither
party shall be liable for consequential damages.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by
their respective officers thereunto duly authorized as of the day and year first
above written.
AMERICAN
BIO MEDICA CORPORATION
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Xxxx
Xxxxxxxxx, Chief Executive Officer
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By:
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Printed Name:
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