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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 30, 1999
AMERICAN BIO MEDICA CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
New York 0-28666 14-1702188
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
300 Fairview Avenue, Hudson, New York 12534
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (800) 227-1243
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
CC Investments, LDC ("CCI") and American Bio Medica Corporation
("ABMC") are parties to a certain Registration Rights Agreement dated April 24,
1998 (the "Registration Rights Agreement") whereby the Company agreed to
register the resale by CCI of shares of the Company's common stock (the "Common
Stock") issuable upon conversion of the Company's Series D Preferred Stock and
upon exercise of certain stock purchase warrants. Pursuant to the Registration
Rights Agreement if a registration statement covering the resale by CCI of such
shares of Common Stock (the "Registration Statement") was not declared effective
by July 23, 1998 or once declared effective sales could not made thereunder for
any reason (a "Registration Statement Deficiency"), the Company agreed to pay to
CCI a late registration penalty in an amount calculated pursuant to section 2 of
the Registration Rights Agreement (the "Late Registration Penalty") and CCI
reserved the right to pursue actual damages for a Registration Statement
Deficiency. The Registration Statement filed by the Company on September 28,
1998 (the "1999 Registration Statement") was not declared effective until March
17, 1999, and once declared effective sales could not be made thereunder through
the Effective Date (as defined in the 1999 Agreement), resulting in a Late
Registration Penalty and a Registration Statement Deficiency (the "1999 Late
Registration Penalty"). Prior to April 30, 1999, CCI had communicated to the
Company that it was willing to accept $250,000 in cash in settlement of the 1999
Late Registration Penalty. On May 28, 1999, CCI and the Company entered into a
definitive Agreement as of April 30, 1999 (the "1999 Agreement") to settle all
claims by CCI against the Company relating to the Registration Statement
Deficiency, including the 1999 Late Registration Penalty, any actual damages
suffered by CCI relating to or arising from the Registration Deficiency and
certain other claims under the Securities Purchase Agreement dated April 24,
1998 (the "Securities Purchase Agreement") between the Company and CCI. Pursuant
to the 1999 Agreement, the Company gave consideration of $225,000 to CCI on June
1, 1999 ($100,000 in cash and a one-year promissory note in the principal amount
of $125,000 accruing interest at the rate of 14% annually). All capitalized
terms have the meanings assigned to such terms in the 1999 Agreement filed as
Exhibit 4.1 to this Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Agreement entered into as of April 30, 1999, between
American Bio Medica Corporation (the "Company") and
CC Investments, LDC ("CCI") (the "1999 Agreement").
4.2 Promissory Note dated May 28, 1999 from the Company
payable to CCI pursuant to the terms of the 1999
Agreement.
4.3 Form of Securities Purchase Agreement between the
Company and CCI (incorporated by reference to Exhibit
4.1 of the Company's Current Report on Form 8-K filed
April 30, 1998).
4.4 Form of Registration Rights Agreement between the
Company and CCI (incorporated by reference to Exhibit
4.2 of the Company's Current Report on Form 8-K filed
April 30, 1998).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
Dated: June 4, 1999 By: /s/ Stan Cipkowski
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Stan Cipkowski,
President and Principal
Executive Officer
By: /s/ John F. Murray
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John F. Murray,
Treasurer and Principal
Financial Officer
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Exhibit 4.1
AGREEMENT
This AGREEMENT is entered into as of April 30, 1999 (the "Agreement")
by and between CC INVESTMENTS, LDC ("CCI") and AMERICAN BIO MEDICA CORPORATION,
a New York corporation (the "Company").
RECITALS
WHEREAS, CCI and the Company are parties to a certain Registration
Rights Agreement dated April 24, 1998 (the "Registration Rights Agreement")
whereby the Company agreed to register the resale by CCI of shares of the
Company's common stock (the "Common Stock") issuable upon conversion of the
Company's Series D Preferred Stock (the "Preferred Stock") and upon exercise of
certain stock purchase warrants dated April 24, 1998 ("Warrants").
WHEREAS, pursuant to the Registration Rights Agreement if a
registration statement covering the resale by CCI (the "Registration Statement")
was not declared effective by July 23, 1998 or once declared effective sales
could not made thereunder for any reason (a "Registration Statement
Deficiency"), the Company agreed to pay to CCI a late registration penalty in an
amount calculated pursuant to section 2 of the Registration Rights Agreement
(the "Late Registration Penalty") and CCI reserved the right to pursue actual
damages for a Registration Statement Deficiency.
WHEREAS, the Registration Statement filed by the Company on September
28, 1998 (the "1999 Registration Statement") was not declared effective until
March 17, 1999, and once declared effective sales could not be made thereunder
through the Effective Date (as defined below), resulting in a Late Registration
Penalty and a Registration Statement Deficiency (the "1999 Late Registration
Penalty")
WHEREAS, the parties hereto desire to enter into this Agreement to
settle all claims by CCI against the Company relating to the Registration
Statement Deficiency, including the 1999 Late Registration Penalty, any actual
damages suffered by CCI relating to or arising from the Registration Deficiency
and certain other claims under the Stock Purchase Agreement dated April 24, 1998
(the "Stock Purchase Agreement") between the Company and CCI.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements of the parties contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions: Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Registration Rights
Agreement and the Stock Purchase Agreement as applicable.
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2. Late Registration Penalty: On June 1, 1999 the Company shall pay to
CCI $225,000 as follows:
a. $100,000 by wire transfer of immediately available funds to an
account designated by CCI; and
b. delivery of a one-year promissory note in the principal amount of
$125,000 accruing interest at the rate of 14% annually in the form
of Exhibit A.
3. Waiver: CCI agrees to waive its rights and remedies, and to release
the Company from all actions, claims, damages, and obligations, and all other
liabilities of whatever nature existing as of the Effective Date (as defined
below) relating to or arising from (a) the Registration Statement Deficiency
pursuant to the Registration Rights Agreement, the Stock Purchase Agreement, the
Warrants or the Certificate of Designation of the Preferred Stock (the
"Certificate"), including, without limitation, the 1999 Late Registration
Penalty and any actual damages suffered by CCI relating to or arising from the
Registration Statement Deficiency and (b) the Company's failure to solicit by
proxy the Stockholder Approval (as defined in the Certificate) in accordance
with Section 4.11 of the Stock Purchase Agreement and Sections V(D) and V(E) of
the Certificate so long as the Company solicits by proxy the Stockholder
Approval no later than September 30, 1999 or its 1999 annual meeting of
shareholders whichever is earlier. This waiver and release shall be effective as
of the latest date that the (a) the Form 8-K and the amendments described in
Section 4 below are filed by the Company with the SEC, (b) the Registration
Statement is effective and useable by CCI for the resale of the Common Stock and
(c) CCI has received the $100,000 payment and the duly executed promissory note
described in Section 2 above (the "Effective Date"). CCI does not waive any
rights or remedies arising after the Effective Date including, but not limited
to, rights and remedies relating to Registration Statement Deficiencies or Late
Registration Penalties arising pursuant to the Registration Rights Agreement,
the Stock Purchase Agreement, the Certificate or the Warrants. Notwithstanding
the foregoing, CCI agrees that if the filing of the Form 8-K or amendments
described in Section 4 below results in (a) the issuance of a stop order by the
SEC with respect to the 1999 Registration Statement or (b) the SEC reviewing
such amendments, the Form 8-K or the 1999 Registration Statement and such review
causes the 1999 Registration Statement to cease being useable by CCI for the
resale of the Common Stock, then the Late Registration Penalty shall not begin
to accrue until 35 days after the SEC notifies the Company of the stop order so
long as the Company is using its best efforts to have the stop order lifted or
35 days after the Company receives comments on any of the amendments, Form 8-K
or 1999 Registration Statement to the extent such comments cause the 1999
Registration Statement to not be useable by CCI for the resale of the Common
Stock, as applicable. If the Company fails to pay when due (whether at maturity
or otherwise) any principal or interest on the promissory note, fails to file
with the SEC the Form 8-K and amendments described in Section 4 below on or
before the Filing Date (as defined below)or fails to pay the payment required
pursuant to Section 2 above in accordance with the terms thereof, this waiver
shall be rescinded and the rights and remedies of CCI waived hereunder shall be
restored as if this waiver had never been granted.
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4. 8-K: The Company agrees to file on or before June 4, 1999 (the
"Filing Date") (a) a Form 8-K pursuant to the Securities Exchange Act of 1934,
as amended, describing the 1999 Late Registration Penalty, this Agreement and
the settlement agreed to herein and to include as an exhibit therein a copy of
this Agreement and (b) amendments to all periodic reports previously filed by
the Company pursuant to the Securities Exchange Act of 1934, as amended,
including, but not limited to, reports on Form 10-K and 10-Q, as necessary to
permit CCI to immediately resell the Common Stock pursuant to the 1999
Registration Statement .
5. Representations of the Company: The Company hereby represents and
warrants to CCI as follows as of the date hereof:
a. Authorization and Enforcement: (i) The Company has the requisite
power and authority to enter into and perform its obligations under this
Agreement and the Note; (ii) the execution, delivery and performance of this
Agreement and the Note by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by the
Company's Board of Directors and no further consent or authorization of the
Company, its Board of Directors or its stockholders is required; and (iii) this
Agreement and the Note constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms.
b. No Conflicts: The execution, delivery and performance of this
Agreement and the Note by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Certificate of Incorporation or the bylaws of the Company; or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights or
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which any
property or assets of the Company or any of its subsidiaries is bound or
affected.
6. Representations of CCI: CCI hereby represents and warrant to the
Company as of the date hereof that this Agreement has been duly and validly
authorized, executed and delivered by CCI and is a valid and binding agreement
of CCI enforceable in accordance with its terms.
7. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. Notwithstanding the foregoing, the Company may not assign its rights or
obligations under this Agreement to any other party without CCI's prior written
consent which may be withheld by CCI for any or no reason.
8. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable
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law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.
9. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement. This Agreement may be executed by facsimile signature
and shall be binding when so executed.
10. Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
11. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits hereto shall be governed by, and construed in accordance with, the laws
of the State of New York, without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
12. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable overnight courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to each party at the address indicated in the
Registration Rights Agreement.
13. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on May 28, 1999.
AMERICAN BIO MEDICA CORPORATION
By:
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Its:
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CCI INVESTMENTS, LDC
By: Castle Creek Partners, L.L.C.
Its: Investment Manager
By:
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Its:
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Exhibit 4.2
AMERICAN BIO MEDICA CORPORATION
PROMISSORY NOTE
May 28, 1999 $125,000
American Bio Medica Corporation, a New York corporation (the
"Company"), hereby promises to pay to the order of CC Investments, LDC the
principal amount of $125,000 together with interest thereon calculated from the
date hereof in accordance with the provisions of this Note.
This Note was issued pursuant to an Agreement, entered into as
of April 30, 1999 (as amended and modified from time to time, the "Agreement"),
between the Company and the original holder of this Note.
1. Payment of Interest. Except as otherwise expressly provided
in paragraph 3(b) hereof, interest shall accrue at the rate of fourteen percent
(14%)per annum on the unpaid principal amount of this Note outstanding from time
to time, or (if less) at the highest rate then permitted under applicable law.
The Company shall pay to the holder of this Note all accrued interest on the
date the principal amount of this Note is due (whether at maturity or
otherwise). Unless prohibited under applicable law, any accrued interest which
is not paid on the date on which it is due and payable shall bear interest at
the same rate at which interest is then accruing on the principal amount of this
Note until such interest is paid. Interest shall accrue on any principal payment
due under this Note and, to the extent permitted by applicable law, on any
interest which has not been paid on the date on which it is due and payable
until such time as payment therefor is actually delivered to the holder of this
Note.
2. Payment of Principal on Note.
(a) Scheduled Payments. The Company shall pay the principal
amount of $125,000 (or such lesser principal amount then outstanding) to the
holder of this Note on May 28, 2000, together with all accrued and unpaid
interest on the principal amount being repaid.
(b) Prepayments. The Company may, at any time and from time to
time without premium or penalty, prepay all or any portion of the outstanding
principal amount of the Note. In connection with each prepayment of principal
hereunder, the Company shall also pay all accrued and unpaid interest to the
date of prepayment on the principal amount of this Note being repaid.
3. Events of Default.
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(a) Definition. For purposes of this Note, an Event of Default
shall be deemed to have occurred if
(i) the Company fails to pay when due and payable
(whether at maturity or otherwise) the full amount of interest then accrued on
this Note or the full amount of any principal payment on this Note;
(ii) the Company fails to perform or observe any
other material provision contained in this Note or in the Agreement, and such
failure is not cured within 5 days after the occurrence hereof;
(iii) any representation, warranty or information
contained in the Agreement is false or misleading in any material respect on the
date made;
(iv) the Company or any subsidiary makes an
assignment for the benefit of creditors or admits in writing its inability to
pay its debts generally as they become due; or an order, judgment or decree is
entered adjudicating the Company or any subsidiary bankrupt or insolvent; or any
order for relief with respect to the Company or any subsidiary is entered under
the Federal Bankruptcy Code; or the Company or any subsidiary petitions or
applies to any tribunal for the appointment of a custodian, trustee, receiver or
liquidator of the Company or any subsidiary, or of any substantial part of the
assets of the Company or any subsidiary, or commences any proceeding (other than
a proceeding for the voluntary liquidation and dissolution of any subsidiary)
relating to the Company or any subsidiary under any bankruptcy reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Company or any subsidiary and either (A)
the Company or any such subsidiary by any act indicates its approval thereof,
consent thereto or acquiescence therein or (B) such petition, application or
proceeding is not dismissed within 60 days;
(v) a judgment in excess of $250,000 is rendered
against the Company or any subsidiary in any case not involving the dispute with
Dr. Robert Freidenberg (disclosed in the Company's Form S-3 Registration
Statement filed September 28, 1998)and, within 60 days after entry thereof, such
judgment is not discharged in full or execution thereof stayed pending appeal,
or within 60 days after the expiration of any such stay, such judgment is not
discharged in full;or
(vi) the Company or any subsidiary defaults in
the performance of any obligation if the effect of such default is to cause an
amount exceeding $250,000 to become due prior to its stated maturity or to
permit the holder or holders of such obligation to cause an amount exceeding
$250,000 to become due prior to its stated maturity.
The foregoing shall constitute Events of Default whatever the
reason or cause for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
(b) Consequences of Events of Default.
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(i) If any Event of Default has occurred the
interest rate on this Note shall increase immediately to the lesser of 18% or
the highest interest rate permitted by law.
(ii) If an Event of Default of the type described
in subparagraph 3(a)(iv) has occurred, the aggregate principal amount of this
Note (together with all accrued interest thereon and all other amounts due and
payable with respect thereto) shall become immediately due and payable without
any action on the part of the holders of this Note, and the Company shall
immediately pay to the holders of this Note all amounts due and payable with
respect to this Note.
(iii) If any Event of Default has occurred (other
than under subparagraph 3(a)(iv)), the holder of this Note may declare all or
any portion of the outstanding principal amount of this Note (together with all
accrued interest thereon and all other amounts due and payable with respect
thereto) to be immediately due and payable and may demand immediate payment of
all or any portion of the outstanding principal amount of this Note (together
with all such other amounts then due and payable).
(iv) The holder of this Note shall also have any
other rights which such holder may have been afforded under any contract or
agreement at any time and any other rights which such holder may have pursuant
to applicable law.
(v) The Company hereby waives diligence,
presentment, protest and demand and notice of protest and demand, dishonor and
nonpayment of this Note, and expressly agrees that this Note, or any payment
hereunder, may be extended from time to time and that the holder hereof may
accept security for this Note or release security for this Note, all without in
any way affecting the liability of the Company hereunder.
4. Amendment and Waiver. Except as otherwise expressly
provided herein, the provisions of this Note may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company has obtained the written consent of the
holder of this Note.
5. Payments. All payments to be made to the holder of this
Note shall be made in the lawful money of the United States of America in
immediately available funds.
6. Place of Payment. Payments of principal and interest shall
be paid by wire transfer of immediately available funds to an account designated
by the holder of this Note.
7. Business Days. If any payment is due, or any time period
for giving notice or taking action expires, on a day which is a Saturday, Sunday
or legal holiday in the State of New York, the payment shall be due and payable
on, and the time period shall automatically be extended to, the next business
day immediately following such Saturday, Sunday or legal holiday, and interest
shall continue to accrue at the required rate hereunder until any such payment
is made.
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8. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Note shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York.
9. Application of Payments. All payments shall be applied
first, to accrued and unpaid interest on the unpaid principal balance of this
Note and then to the unpaid principal balance of this Note.
10. Late Charge. If a payment of principal or interest to be
made pursuant to this Note becomes past due for a period in excess of 5 days,
The Company shall pay on demand to CCI a late charge of 2% of the amount of such
overdue payment.
11. Costs of Collection. If any suit or action is instituted
or attorneys are employed to collect this Note or any part hereof, the Company
promises and agrees to pay all costs of collection, including all court costs
and reasonable attorneys' fees based upon customary hourly rates and not a
percentage of the indebtedness outstanding.
12. WAIVER OF JURY TRIAL. THE COMPANY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS NOTE WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE COMPANY AGREES THAT ANY COURT
PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the Company has executed and delivered
this Note on May 28, 1999.
AMERICAN BIO MEDICA CORPORATION
Attest By
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Its
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