EXHIBIT 10.5

Execution Version

 

OMNIBUS AMENDMENT AGREEMENT

 

This OMNIBUS AMENDMENT AGREEMENT (this “Amendment”), dated as of July 16, 2019,
is entered into by and among APPLIED DNA SCIENCES, INC., a Delaware corporation
(the “Company”) and each of the investors listed on Schedule I attached hereto
(each, a “Buyer” and collectively, the “Buyers”).

 

WITNESSETH:

 

WHEREAS, the Company and each Buyer party thereto entered into that certain
Securities Purchase Agreement, dated as of August 31, 2018 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “August
Securities Purchase Agreement”) and the Company and each Buyer party thereto
entered into that certain Securities Purchase Agreement, dated as of November
29, 2018 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “November Securities Purchase Agreement” and together
with the August Securities Purchase Agreement, the “Securities Purchase
Agreements”), pursuant to which the Company sold, and each Buyer purchased, on a
several and not joint basis the principal amount of the Notes issued pursuant to
the Securities Purchase Agreements (as such Notes may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Notes”);
and

 

WHEREAS, the Company and each Buyer party thereto entered into that certain
Registration Rights Agreement, dated as of August 31, 2018 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “August
Registration Rights Agreement”) and the Company and each Buyer party thereto
entered into that certain Registration Rights Agreement, dated as of November
29, 2018 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “November Registration Rights Agreement” and together
with the August Registration Rights Agreement, the “Registration Rights
Agreements”), pursuant to which the Company sold, and each Buyer purchased, on a
several and not joint basis the principal amount of the Notes issued pursuant to
the Securities Purchase Agreements (as such Notes may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Notes”);
and

 

WHEREAS, the Company has requested and the Buyers, by their execution and
acknowledgement hereof, have each agreed, subject to the terms of this
Amendment, to amend the Securities Purchase Agreements and the Registration
Rights Agreements, as provided herein.

 

NOW, THEREFORE, the parties hereto hereby agree as follows, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and intending to be legally bound:

 

1.          Definitions. Capitalized terms used and not otherwise defined in
this Amendment shall have the respective meanings given to such terms in the
applicable Securities Purchase Agreement or the applicable Registration Rights
Agreement, as applicable.

 

 

 

 

2.          Amendment to the Securities Purchase Agreements.

 

(a)          The second Whereas of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Each Buyer wishes to purchase on a several and not a joint basis, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
that principal amount of the Notes, in substantially the form attached hereto as
Exhibit A (the “Notes”), set forth opposite such Buyer’s name in column (3) on
the Schedule of Buyers attached hereto. The Notes will be one of an issue of
senior secured convertible notes of the Company issued pursuant to a securities
purchase agreement by and among the parties thereto (such other secured
convertible notes, the “Other Notes” and collectively with the Notes, the
“Company Notes”).”

 

(b)          The last paragraph of Section 2(f) of each of the Securities
Purchase Agreements is hereby amended and restated, in its entirety, as follows:

 

“If a legend is not required pursuant to the foregoing, the Company shall no
later than two (2) Business Days following the delivery by the Buyer to the
Company or the transfer agent (with notice to the Company) of a legended
certificate representing such Securities (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, if applicable), together with any other deliveries
from the Buyer as may be required above in this Section 2(f), as directed by the
Buyer, either: (A) provided that the Company’s transfer agent is participating
in the DTC Fast Automated Securities Transfer Program and such Securities are
Conversion Shares, credit the aggregate number of shares of Common Stock to
which the Buyer shall be entitled to the Buyer’s or its designee’s balance
account with DTC through its Deposit/Withdrawal at Custodian system or (B) if
the Company’s transfer agent is not participating in the DTC Fast Automated
Securities Transfer Program or the Securities are not shares of Common Stock,
issue and deliver (via reputable overnight courier) to the Buyer, a certificate
representing such Securities that is free from all restrictive and other
legends, registered in the name of the Buyer or its designee.”

 

 -2- 

 

 

(c)          Section 2(k) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Sold to Various Buyers. Such Buyer understands that the Notes (i) may be sold
to various buyers in one or more Closings, (ii) will generally be for a term of
three years but may have varying maturity dates, (iii) may be purchased by
officers and directors of the Company, (iv) regardless of issue or sale date,
will be secured on a pari passu basis by the same Security Document, and the
perfection of any related security interest is not required to occur until 30
days after the first Closing Date and (v) may be issued in a principal amount of
up to $5,500,000. In addition, Buyer understands that a majority of the
principal amount of the Notes outstanding prior to the date hereof have been
purchased by the Chief Executive Officer of the Company (the “CEO”). Buyer also
understands that so long as the principal amount of the Company Notes does not
exceed $5,500,000 the Company may offer and sale additional Company Notes to
existing holders or new investors without such Buyer’s prior consent or
approval. Further, Buyer understands that an affirmative vote of the holders of
at least 70% of the outstanding principal of the Company Notes are required to
direct the approval of amendments to the Transaction Documents and to control
the demand rights granted pursuant to the Registration Rights Agreement, an
affirmative vote of holders of at least 50% of the outstanding principal of the
Company Notes are required to direct the actions of the Collateral Agent and an
affirmative vote of at least 30% of the outstanding principal of the Company
Notes is required to call an Event of Default (as defined in the Company
Notes).”

 

(d)          Each of the Securities Purchase Agreements is hereby amended by
adding the following Section 3(f) as follows:

 

“(f) Material Assets of Subsidiaries. Other than LineaRX, Inc., a Delaware
corporation and APDN (B.V.I.) Inc., a corporation organized under the laws of
the British Virgin Islands, no Subsidiary of the Company holds any material
assets of the Company.”

 

(e)          Section 4(d)(v) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“The Collateral Agent may resign or be removed by the holders of the Company
Notes (by an affirmative vote of the holders of at least 50% of the outstanding
principal of the Company Notes) as Collateral Agent hereunder at any time upon
at least thirty (30) days’ prior notice. If the Collateral Agent at any time
shall resign, the holders of the Company Notes shall (by an affirmative vote of
the holders of at least 50% of the outstanding principal of the Company Notes),
within ten (10) days after such notice appoint a successor Collateral Agent
which shall thereupon become the Collateral Agent hereunder and under the
Security Document. If no successor Collateral Agent shall have been so
appointed, and shall have accepted such appointment, within the above time frame
the retiring Collateral Agent may appoint a successor. Upon the acceptance of
any appointment as Collateral Agent hereunder by a successor Collateral Agent,
such successor Collateral Agent shall be entitled to receive from the retiring
Collateral Agent such documents of transfer and assignment as such successor
Collateral Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under this Agreement. After the effective date of any
retiring Collateral Agent’s resignation hereunder as collateral agent, the
provisions of this section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under this Agreement.”

 

 -3- 

 

 

(f)          Section 4(d)(vi) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“The Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of any default unless the Collateral Agent has received a copy of a
notice thereof from a Buyer referring to this Agreement and describing such
default. In the event that the Collateral Agent receives such a notice, the
Collateral Agent shall promptly give notice thereof to the other holders of the
Company Notes and to the Company. The Collateral Agent shall be permitted to
take such action with respect to any default as provided in this Agreement and
the Security Document.”

 

(g)          Section 4(d)(viii) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Upon any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to its creditors upon any
dissolution or winding-up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings including, without limitation, all amounts
received by the Collateral Agent on behalf of the Buyers, or received by the
Buyers, shall be paid by the Company in accordance with its outstanding Secured
Obligations (as defined in the Security Document) to each of the Buyers in
accordance with clause (xi) below. Any and all amounts referred to in this
clause (viii) or any other amounts or proceeds of collateral received by any of
the Buyers (x) shall be held in trust for the benefit of all of the holders of
the Company Notes, (y) shall be immediately delivered by the applicable Buyers
to the Collateral Agent in the amount and form received, and (z) shall be
apportioned, paid over or delivered among the holders of the Company Notes in
accordance with clause (xi) of this Agreement.”

 

(h)          Section 4(d)(ix) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Except as provided by law, the security interests in the Collateral shall be
for the ratable benefit of the holders of the Company Notes, shall rank equally
in priority, none being senior or subordinate to any other. No Buyer shall
contest the validity, perfection, priority or enforceability of the lien of any
other holder of the Company Notes in the Collateral. Each Buyer, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral under this Agreement, the
Security Document, pursuant to applicable law, or otherwise, it being understood
and agreed by each Buyer that all rights and remedies under this Agreement, the
Security Document, pursuant to applicable law, or otherwise, may be exercised
solely by the Collateral Agent for the benefit of the Buyers in accordance with
the provisions of this Agreement and the Security Document.”

 

 -4- 

 

 

(i)          Section 4(d)(xi) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Any and all Collateral Proceeds Amount and any other amounts or proceeds of
Collateral received by any of the Buyers shall be held in trust for the benefit
of all of the holders of the Company Notes, shall be immediately delivered by
the applicable Buyer to the Collateral Agent in the amount and form received,
and, subject to the rights to any of the Collateral Proceeds Amount or such
other amounts or proceeds of Collateral of the holders of the other security
interests in the Collateral referred to in clause (x) above, shall be
apportioned, paid over or delivered as follows: first, to the Collateral Agent
for the payment or reimbursement of any expenses and fees of, or any other
amount payable to, the Collateral Agent hereunder or under the Security
Document, and next, among the holders of the Company Notes on a pro rata basis
to each in accordance with the Company’s outstanding obligations to each of the
holders of the Company Notes.”

 

(j)          Each of the Securities Purchase Agreements is hereby amended by
adding the following Section 4(e), 4(f), 4(g) and 4(h) as follows:

 

“(e)          Ranking. All payments due under the Notes shall rank pari passu
with the Other Notes.

 

(f)          After-Acquired Subsidiary. The Company will, upon the acquisition
or creation of any Subsidiary after the date hereof (each subsidiary, an
“After-Acquired Subsidiary”), cause such After-Acquired Subsidiary (i) to
execute a guaranty guaranteeing the principal and interest of the Notes with the
Collateral Agent for the ratable benefit of the holders of the Company Notes and
(ii) to grant to the Collateral Agent, for the ratable benefit of the holders of
the Company Notes, a security interest in all of such After-Acquired
Subsidiary’s tangible and intangible assets.

 

 -5- 

 

 

(g)          Subsidiary Collateral Sales. In the event the Company sells any
assets (other than asset sales in the ordinary course) of any Subsidiary after
the date hereof or causes such Subsidiary to sell any assets (other than asset
sales in the ordinary course), the Company will first offer the net proceeds of
such asset sale to repay the Company Notes on a pro rata basis to each holder of
the Company Notes in accordance with the Company’s outstanding obligations to
each of the holders of the Company Notes. The Company shall provide 10 days
prior written notice of such asset sale (the “Asset Sale Notice”) to the holders
of the Company Notes. If the Buyer exercises its right to receive the net
proceeds of such asset sale on a pro rata basis, such Buyer must provide notice
in writing to the Company on or before the fifth Trading Day following the date
on which the Asset Sale Notice was delivered to the Buyer; provided that if the
Company receives no such notice in writing from the Buyer, such Buyer shall be
deemed to have notified that Company that it does not elect such right to
receive the net proceeds of such asset sale on a pro rata basis.

 

(h)          Loans to Subsidiaries. After the date hereof, the Company shall
not, directly or indirectly, lend to or invest in, any Subsidiary of the Company
without causing such Subsidiary (i) to execute a guaranty in the amount of such
funds received from the Company guaranteeing the principal and interest of the
Notes with the Collateral Agent for the ratable benefit of the holders of the
Company Notes and (ii) to grant to the Collateral Agent, for the ratable benefit
of the holders of the Company Notes, a security interest in the amount of such
funds received from the Company in all of such Subsidiary’s tangible and
intangible assets.”

 

(k)          Section 9(e) of each of the Securities Purchase Agreements is
hereby amended and restated, in its entirety, as follows:

 

“Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the
Buyer, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. In no event shall any amendment,
modification or waiver be made to this Agreement which would adversely affect
the economic terms of the holders of the Company Notes, including but not
limited to any change in the Conversion Price, Maturity Date, Collateral,
interest rate or schedule of payment, redemptions or conversion, or any sale or
change in the holders priority in the Collateral subject to a security interest,
without the prior written consent of each holder of the Company Notes.. No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Required Holders (as defined in the Note),
and any amendment to this Agreement made in conformity with the provisions of
this Section 9(e) shall be binding on the Buyer and holders of Securities, as
applicable. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the applicable Securities then outstanding. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents or holders of Notes. The Company has not, directly or indirectly, made
any agreements with the Buyer relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents. Without limiting the foregoing, the Company confirms
that, except as set forth in this Agreement, the Buyer has not made any
commitment or promise or has no other obligation to provide any financing to the
Company or otherwise.”

 

 -6- 

 

 

3.          Amendment to the Registration Rights Agreements.

 

(a)          The first Whereas of each of the Registration Rights Agreements is
hereby amended to add the following sentence at the end of the paragraph:

 

“The Notes will be one of an issue of senior secured convertible notes of the
Company issued pursuant to a securities purchase agreement by and among the
parties thereto (such other secured convertible notes, the “Other Notes” and
collectively with the Notes, the “Company Notes”).”

 

(b)          The definition of “Registrable Securities” in Section 1(i) in each
of the Registration Rights Agreements is hereby deleted in its entirety and
replaced with the following:

 

Registrable Securities” means (i) the Conversion Shares issued or issuable upon
conversion or redemption of the Company Notes and (ii) any share capital of the
Company issued or issuable with respect to the Conversion Shares or the Company
Notes as a result of any stock split, stock dividend, recapitalization, exchange
or similar event or otherwise.

 

(c)          The definition of “Required Holders” in Section 1(k) in each of the
Registration Rights Agreements is hereby deleted in its entirety and replaced
with the following:

 

“Required Holders” means the holders of at least 70% of the Registrable
Securities.

 

4.          Ratification. This Amendment shall be construed in connection with
and as a part of each of the Securities Purchase Agreements, as applicable, and
each of the Registration Rights Agreements, as applicable, and, except as
expressly amended by this Amendment, all terms, conditions, covenants,
representations and warranties contained in each of the Securities Purchase
Agreements and the Registration Rights Agreements are hereby ratified and shall
be and remain in full force and effect. Any and all notices, requests,
certificates and other instruments executed and delivered after the execution
and delivery of this Amendment may refer to the Securities Purchase Agreements
and the Registration Rights Agreements, without making specific reference to
this Amendment, but nevertheless all such references shall include this
Amendment.

 

5.          Parties Bound. This Amendment shall be binding on and inure to the
benefit of (i) the Company and (ii) the Buyers, as well as each of their
respective heirs, executors, administrators, legal representatives, successors
and assigns, except as otherwise expressly provided for herein.

 

6.          Counterparts and Signatures. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original, and all of which taken together shall constitute but
one and the same instrument. The transmission or receipt of a facsimile or
similar communication being a reproduction of a party’s signature or initial
shall produce the same legal result as the transmission or receipt of an
original signature or initial.

 

 -7- 

 

 

7.          Severability of Provisions. Any provision of this Amendment which is
prohibited and unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibitive or enforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

 

8.          Section Headings. The Section headings used in this Amendment are
for convenience only and shall not affect the construction of this Amendment.

 

9.          Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.

 

[remainder of page intentionally left blank]

 

 -8- 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first above written.

 

 

COMPANY:       APPLIED DNA SCIENCES, INC., a Delaware corporation    

 

  By: /s/ Beth Jantzen   Print Name: Beth Jantzen, CPA   Its: Chief Financial
Officer    

 

[Signatures Continue on Following Page]

 

Signature Page to Omnibus Amendment Agreement

 

  

 

 

ACKNOWLEDGED AND CONSENTED TO BY BUYERS:

 

By: /s/ James A. Hayward   Print Name: James A. Hayward       By: /s/ Judith
Murrah   Print Name: Judith Murrah       By: /s/ Yavoc Shamash   Print Name:
Yavoc Shamash       By: /s/ Robert Catell   Print Name: Robert Catell       By:
/s/ Elizabeth Schmalz Ferguson   Print Name: Elizabeth Schmalz Ferguson      
By: /s/ Gregg Baldwin   Print Name: Gregg Baldwin       By: /s/ William
Montgomery   Print Name: William Montgomery       By: /s/ Johnette van Eeden  
Print Name: Johnette van Eeden       By: /s/ John Cartier   Print Name: John
Cartier       By: /s/ Wayne Buchen   Print Name: Wayne Buchen  

 

Signature Page to Omnibus Amendment Agreement

 

  

 

 

ACKNOWLEDGED AND CONSENTED TO BY BUYERS (continued):

 

Delabarta II       By: /s/ John F. Bitzer III   Print Name: John F. Bitzer III  
Title: President       The Rodgers Living Trust Dated April 7, 1995       By:
/s/ Jay D. Rodgers   Print Name: Jay D. Rodgers   Title: Trustee  

 

Signature Page to Omnibus Amendment Agreement

 

  

 

 

SCHEDULE I
SCHEDULE OF BUYERS

 Buyer

  Address for Notices James A. Hayward   1 Emmet Drive, Stony Brook, NY 11790
and
50 Health Sciences Drive, Stony Brook, NY 11790 Judith Murrah   8 Old Post Lane,
Saint James, NY 11780 Delabarta II   c/o Delaware Corporate Management, 1105
North Market Street, Suite 1300, Wilmington, DE 19801 Yavoc Shamash   7 Quaker
Hill Road, Stony Brook, NY 11790 Robert Catell   62 Osborne Road, Garden City,
NY 11530 Elizabeth Schmalz Ferguson   101 Jersey Avenue, Spring Lake, NJ 07762
The Rodgers Living Trust Dated April 7, 1995   1277 Porter Road, Flower Mound,
TX 75022 Gregg Baldwin   3391 Ichabod Way, The Villages, FL 32163 William
Montgomery   34211 Seavey Loop Road, Eugene, OR 97405 Johnette van Eeden   451
Westpark Way, Suite 5, Euless, TX 76040 John Cartier   P.O. Box East Hampton, NY
11937 Wayne Buchen   50 Health Sciences Drive, Stony Brook, NY 11790

 

Schedule I to Omnibus Amendment Agreement