EXHIBIT 4.20
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
AMERICAN BIO MEDICA CORPORATION
Warrant No. 001 Dated: October 28, 2000
Amend No. 5
This certifies that Steven Grodko (the "Holder"), for value received, is
entitled, subject to the terms set forth below, to purchase from AMERICAN BIO
MEDICA CORPORATION, a New York Corporation (the "Company"), 400,000, (Four
hundred thousand) fully paid and nonassessable Common Shares (the "Warrant
Shares") of the Company, par value $.01 per share (the "Stock"), at a price of
$0.95 per share (the "Stock Purchase Price") at any time but not earlier than
that Commencement Date (as defined below) or later than 5:00 pm (New York Time)
on the Expiration Date (as defined below) upon surrender to the Company at its
principal office at 122 Smith Road, Kinderhook, New York 12106, Attention:
Corporate Secretary (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed with the form of Exercise
Notice attached hereto duly completed and signed upon payment in cash or
cashier's check of the aggregate Stock Purchase Price for the number of shares
for which the Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of Warrant Shares
purchasable hereunder are subject to adjustment as provided in Section 3 of this
Warrant. This Warrant and all rights hereunder, to the extent not exercised in
the manner set forth herein shall terminate and become null and void on the
Expiration Date (as defined below). "Commencement Date" shall mean the date of
this Warrant. "Expiration Date" shall mean the sixth anniversary of the
Commencement Date.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Warrant Shares.
(a) This Warrant is exercisable by payment of the Stock Purchase Price by
cash payment, certified check or wire transfer, in the manner set forth above at
the option of the Holder at any time but not earlier than the Commencement Date
or later than 5:00 pm (New York Time) on the Expiration Date for all or a
portion of the shares of Stock subject to this Warrant. The Company agrees that
the Warrant Shares purchased under this Warrant shall be and are deemed to be
issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for such shares (unless the Conversion Right is exercised). Subject
to the provisions of Section 2, certificates for the Warrant Shares so purchased
shall be delivered to the Holder by the Company's transfer agent at the
Company's expense within a reasonable amount of time after the rights
represented by this Warrant have been exercised. The stock certificate(s) so
delivered shall be registered in the name of the Holder or such other name as
shall be designated by the Holder, subject to the limitations contained in
Section 2. If, upon exercise of this Warrant, fewer than all of the shares of
Stock evidenced by this Warrant are purchased prior to the Expiration Date of
this Warrant, one or more new warrants substantially in the form of, and on the
terms of, this Warrant will be issued for the remaining number of shares of
Stock not purchased upon exercise of this Warrant.
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Exhibit 4.20
(b) Subject to the mutual agreement of the Company and the Holder, in lieu
of the payment of the Stock Purchase Price, the Holder may require the Company
to convert this Warrant into shares of Stock (the "Conversion Right") as
provided for in this Section 1(b). Upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of any of the
Stock Purchase Price) that number of share of Stock equal to the quotient
obtained by dividing (x) the value of the Warrant at the time the Conversion
Right is exercised (determined by subtracting the aggregate Stock Purchase Price
in effect immediately prior to the exercise of the Conversion Right from the
aggregate Market Value (as defined in Section 1(d) below) for the Warrant Shares
immediately prior to the exercise of the Conversion Right) by (y) the Market
Value.
(c) The Conversion Right may be exercised by the Holder by delivering the
Warrant Certificate with a duly executed Exercise Notice in the form attached
hereto with the conversion section completed by the Company.
(d) For the sole purpose of determining the number of Warrant Shares which
shall be delivered to the Holder by the Company pursuant to the Conversion Right
as ser forth in Section 1(b) above, "Market Value" shall mean the average daily
closing price of a share of the Stock listed on the Nasdaq SmallCap Market (or
such other exchange or quotation system on which the Stock may then be listed)
for the ten (10) consecutive days of trading ending on the third business day
immediately preceding the date of exercise of such Conversion Right, or in the
event the Stock is not then publicly traded, the Market Value shall be
determined in good faith by the Company and the Holder. In the event the Parties
are unable to agree upon the Market Value within thirty (30) days of the date of
exercise of the Conversion Right, the Market Value shall be determined by a
nationally recognized investment banking firm by lot from two (2) investment
baking firms chosen by the Company and two (2) investment banking firms chosen
by the Holder, none of which shall have been engaged by either Party within five
(5) years prior to the date of selection.
2. Shares to be fully paid; Reservation of Shares.
The Company covenants and agrees that the Warrant Shares will, upon
issuance, be duly authorized, validly issued, fully paid and nonasessable and
free from all preemptive rights of any stockholder and free of all taxes (other
than income taxes which may be applicable to the Holder), liens and charges with
respect to the issuance thereof. The Company covenants that it will reserve and
keep available a sufficient number of shares of its authorized but unissued
Stock for such exercise. The Company will take all such reasonable action as may
be necessary to assure that such shares of Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirement of any domestic securities exchange or automated quotation system
upon which the Stock may be listed.
3. Adjustment of Stock Purchase Price and Number of Shares.
The Stock Purchase Price and the number of shares purchasable upon the
exercise of this Warrant, shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 3.
3.1 Subdivision or Combination of Stock and Stock Dividend. In case the
Company shall at any time subdivide its outstanding shares of Stock into a
greater number of shares or declare a dividend upon its Stock payable solely in
shares of Stock, the Stock Purchase Price in effect immediately prior to such
subdivision of declaration shall be proportionately reduced, and the number of
shares issuable upon exercise of the Warrant shall be proportionately increased.
Conversely, in case the outstanding shares of Stock of the Company shall be
combined into a smaller number of shares, the Stock Purchase Price in effect
immediately prior to such combination shall be proportionately increased, and
the number of shares issuable upon exercise of the Warrant shall be
proportionately reduced.
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Exhibit 4.20
3.2 Anti-dilution Protection. If at any time prior to the exercise of this
Warrant in full, the Company shall issue or sell any Common Stock or securities
(the "Additional Securities") convertible in Common Stock for consideration per
share (the "Adjusted Per Share Price") (in cash, property or other assets) less
than the Stock Purchase Price on the date of such issuance or sale of Additional
Securities, the Stock Purchase Price in effect immediately prior to such
issuance or sales shall be reduced to the Adjusted Per Share Price, and the
number of Warrants issuable upon exercise of this Warrant shall be
proportionately increased such that the aggregate number of Warrant Shares
issuable under this Warrant multiplied by the Adjusted Per Share Price shall
equal [$905,619] adjusted for any prior exercises. The foregoing adjustment
shall not be made in the event the Company issues or sells Additional Securities
upon exercise of outstanding options or warrants as of the Commencement Date or
options reserved for issuance under the Company's stock option plans as of the
Commencement Date. The anti-dilution protection contained herein shall not be
applicable to any shares already outstanding pursuant to an exercise of this
Warrant.
3.3 Notice of Adjustment. Promptly after adjustment of the Stock Purchase
Price of any increase or decrease in the number of shares purchasable upon the
exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the Holder at the address of the
Holder as shown on the books of the Company. The notice shall be signed by and
authorized officer of the Company and shall state the effective date of the
adjustment and the Stock Purchase Price resulting from such adjustment and the
increase or decrease, if any, in the number of share purchasable at such price
upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the fact upon which such calculation is based.
3.4 Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its Stock;
(b) the Company shall declare any dividend upon its Stock payable in
stock (other than a dividend payable solely in shares of Stock) or
make any special dividend or other distribution to the holders of
its Stock;
(c) there shall be any consolidation or merger of the Company with
another corporation, or a sale of all or substantially all of the
Company's assets to another corporation; or
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company.
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of the Holder as shown on the books of the Company, (i)
at least ten (10) days prior written notice of the date on which the books of
the Company shall close or a record shall be taken for such dividend,
distribution or subscription rights or for determining rights to vote with
respect of any such dissolution, liquidation or winding-up, (ii) at least ten
(10) days prior written notice of the date on which the books of the Company
shall close or a record shall be taken for determining rights to vote in respect
of any such reorganization, reclassification, consolidation, merger or sale, and
(iii) in the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, at least ten (10) days
written notice of the date when the same shall take place. Any notice given in
accordance with clause (i) above shall also specify, in the case of any such
dividend, distribution, or option rights, the date on which the holders of Stock
shall be entitled thereto. Any notice given in accordance with clause (iii)
above shall also specify the date on which the holders of Stock shall be
entitled to exchange their Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale
dissolution, liquidation or winding-up, as the case may be.
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Exhibit 4.20
3.5 Changes in Stock. In case at any time prior to the Expiration Date,
the Company shall be a party to any transaction (including without limitation, a
merger, consolidation, sale of all or substantially all of the Company's assets
or recapitalization of the Stock) in which the previously outstanding Stock
shall be changed into or exchanged for different securities of the Company or
common stock or other securities of another corporation or interests in a
non-corporate entity or other property (including cash) or the Company shall
make a distribution of its shares, other than regular cash dividends on its
outstanding stock, or any combination of any of the foregoing (each such
transaction being herein called the "Transaction" and the date of consummation
of the Transaction being herein called the `Consummation Date", then, as a
condition of the consummation of the Transaction, lawful and adequate provisions
shall be made so that each Holder, upon exercise hereof at any time on or after
the Consummation Date, shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of Stock issuable upon such
exercise prior to the Consummation Date, the highest amount of securities or
other property to which the Holder would actually have been entitled as a
stockholder upon the consummation of the Transaction if the Holder had exercised
such Warrant immediately prior thereto. The provision of the Section 3.5 shall
similarly apply to successive Transactions.
4. Investment Representations.
By receipt of this Warrant, and by its execution, the Holder represents to
the Company the following:
(a) the Holder understands that this Warrant and any Stock purchased upon
its exercise are securities, the issuance of which requires compliance with
federal and state securities laws;
(b) the Holder is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire this Warrant;
(c) the Holder is acquiring this Warrant for investment in the Holder's
own account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"); and
(d) the Holder acknowledges and understands that the securities constitute
"restricted securities" under the Act and must be held indefinitely unless they
are subsequently registered under the Act or an exemption from such registration
is available.
5. Issue Tax. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
6. No Voting or Dividend Rights; Limitation on Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election or directors of the Company
or any other matters or any rights whatsoever as a stockholder of the Company.
In addition, if the Holder of the Warrant does not exercise this Warrant or
convert this Warrant pursuant to Section 1(b) above prior to the occurrence of
an event described above, except as provided in Section 3.1 and 3.5, the Holder
shall not be entitled to receive the benefits accruing to existing holders of
the Stock pursuant to such an event. No dividends or interest shall be payable
or accrued in respect of this Warrant or the interest represented hereby or the
shares purchasable hereunder until, and only to the extent that, this Warrant
shall have been exercised. No provisions hereof, in the absence of affirmative
action by the Holder to purchase shares of Stock, and no mere enumeration herein
of the rights or privileges of the Holder hereof, shall give rise to any
liability of the Holder for the Stock Purchase Price or as a stockholder of the
Company whether such liability is asserted by the Company or by its creditors.
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Exhibit 4.20
7. Restrictions on Transferability of Securities; Compliance with
Securities Act.
7.1 Restrictions on Transferability. This Warrant and the Warrant Shares
shall not be transferable in the absence of the effectiveness of a registration
statement with respect to such securities under the Act, or an exemption
therefrom. This Warrant and the Warrant Shares may be transferred in any manner
of compliance with applicable law.
7.2 Restrictive Legend. In the absence of the effectiveness of
registration under the Act, or an exemption therefrom as contemplated by Section
7.1, each certificate representing the Warrant Shares or any other securities
issued in respect of the Warrant Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), NOR UNDER ANY STATE SECURITIES
LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR SUCH LAWS AND THE
RULES AND REGULATIONS THEREUNDER.
8. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only be an instrument in writing
signed by the party against which enforcement of the same is sought.
9. Notices. Any notice, request or other document required or permitted to
be given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by certified or registered mail, postage prepaid, to each Holder
at its address as shown on the books of the Company or to the Company at the
address indicated therefore in the first paragraph of this Warrant.
10. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the Parties shall
be governed by, the laws of the State of New Jersey without reference to the
principles of conflicts of law.
11. Lost Warrants or Stock Certificates. The Company represents and
warrants to the Holder that upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant or
stock certificate representing Warrant Shares and in the case of any such loss,
theft, destruction or mutilation, upon receipt of an indemnity and, if
requested, bond reasonably satisfactory to the Company, or in the case of any
such mutilation, upon surrender and cancellation of such Warrant or stock
certificate, the Company, at its expense will make and deliver a new Warrant or
stock certificate, or like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
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Exhibit 4.20
12. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share pay
the Holder entitled to such fraction a sum of cash equal to the fair market
value of any such fractional interest as it shall appear on the public market,
or if there is not public market for such shares, then as shall be reasonably
determined by the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer, thereunto duly authorized as of the date first written above.
AMERICAN BIO MEDICA CORPORATION
By: /s/ Melissa A. Decker
--------------------------
Name: Melissa A. Decker
Title: Corporate Secretary
By: /s/ Keith E. Palmer
--------------------------
Name: Keith E. Palmer
Title: CFO & Director
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Exhibit 4.20
FORM OF EXERCISE NOTICE
(To be signed and delivered upon exercise of Warrant)
AMERICAN BIO MEDICA CORPORATION
122 Smith Road
Kinderhook, New York 12106
The undersigned, the Holder of the within Warrant (Warrant Certificate
Number 001, Amend No. 5), hereby irrevocably elects to exercise the purchase
right represented by such Warrant for, and to purchase thereunder, __________
Common Shares, par value $0.01 per share (the "Stock"), of AMERICAN BIO MEDICA
CORPORATION (the "Company"), and subject to the following paragraph, herewith
makes payment of __________ Dollars ($__________) therefore and requests that
the certificate(s) for such shares be issued in the name of, and delivered to,
__________ whose address is __________.
The undersigned does/does not (circle one) request the exercise of the
within Warrant pursuant to the "Conversion Right" set forth in Section 1(b) of
the Warrant.
DATED:
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(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
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- --------------------------- (Address)
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Exhibit 4.20