NEITHER THIS WARRANT NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON THE
EXERCISE HEREOF ("WARRANT SHARES"), AS OF THE DATE OF ISSUANCE HEREOF, HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAW, OR IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
For the Purchase of ______
shares of Common Stock
No.
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
MILESTONE SCIENTIFIC INC.
(A Delaware corporation)
Milestone Scientific Inc., a Delaware corporation (the "Company"),
hereby certifies that for value received, __________ ("Registered Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company, at
any time or from time to time during the period commencing on September , 1997,
and ending on September , 1999, _______ shares of Common Stock, $.001 par value,
of the Company ("Common Stock"), at a purchase price equal to $9.00 per share.
The number of shares of Common Stock purchasable upon exercise of this Warrant,
and the purchase price per share, each as adjusted from time to time pursuant to
the provisions of this Warrant, are hereinafter referred to as the "Warrant
Shares" and the "Purchase Price", respectively.
1. Exercise.
(a) This Warrant may be exercised by Registered Holder, in whole or in
part, by the surrender of this Warrant (with the Notice of Exercise Form
attached hereto as Exhibit I duly executed by Registered Holder) at the
principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful money of the
United States, of an amount equal to the then applicable Purchase Price
multiplied by the number of Warrant Shares then being purchased upon such
exercise.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection l(a) above.
At such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise as provided in subsection
l(c) below shall be deemed to have become the holder or holders of record of the
Warrant Shares represented by such certificates.
(c) As soon as practicable after the exercise of the purchase right
represented by this Warrant, the Company at its expense will use its best
efforts to cause to be issued in the name of, and delivered to, Registered
Holder, or, subject to the terms and conditions hereof, to such other individual
or entity as Registered Holder (upon payment by Registered Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
shares of Warrant Shares to which Registered Holder shall be
entitled upon such exercise plus, in lieu of any fractional share to
which Registered Holder would otherwise be entitled, cash in an
amount determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, stating on the face
or faces thereof the number of shares currently stated on the face
of this Warrant minus the number of such shares purchased by
Registered Holder upon such exercise as provided in subsection l(a)
above.
2. Adjustments.
(a) Split, Subdivision or Combination of Shares. If the outstanding shares
of the Company's Common Stock at any time while this Warrant remains outstanding
and unexpired shall be subdivided or split into a greater number of shares, or a
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dividend in Common Stock shall be paid in respect of Common Stock, the Purchase
Price in effect immediately prior to such subdivision or at the record date of
such dividend, simultaneously with the effectiveness of such subdivision or
split or immediately after the record date of such dividend (as the case may
be), shall be proportionately decreased. If the outstanding shares of Common
Stock shall be combined or reverse-split into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination or reverse split,
simultaneously with the effectiveness of such combination or reverse split,
shall be proportionately increased. When any adjustment is required to be made
in the Purchase Price, the number of shares of Warrant Shares purchasable upon
the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the Purchase
Price in effect immediately prior to such adjustment, by (ii) the Purchase Price
in effect immediately after such adjustment.
(b) Reclassification, Reorganization, Consolidation or Merger. In the case
of any reclassification of the Common Stock (other than a change in par value or
a subdivision or combination as provided for in subsection 2(a) above), or any
reorganization, consolidation or merger of the Company with or into another
corporation (other than a merger or reorganization with respect to which the
Company is the continuing corporation and which does not result in any
reclassification of the Common Stock), or a transfer of all or substantially all
of the assets of the Company, or the payment of a liquidating distribution then,
as part of any such reorganization, reclassification, consolidation, merger,
sale or liquidating distribution, lawful provision shall be made so that
Registered Holder shall have the right thereafter to receive upon the exercise
hereof, the kind and amount of shares of stock or other securities or property
which Registered Holder would have been entitled to receive if, immediately
prior to any such reorganization, reclassification, consolidation, merger, sale
or liquidating distribution, as the case may be, Registered Holder had held the
number of shares of Common Stock which were then purchasable upon the exercise
of this Warrant. In any such case, appropriate adjustment (as reasonably
determined by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of Registered Holder such that the provisions set forth in
this Section 2 (including provisions with respect to the Purchase Price) shall
thereafter be applicable, as nearly as is reasonably practicable, in relation to
any shares of stock or other securities or property thereafter deliverable upon
the exercise of this Warrant.
(c) Price Adjustment. No adjustment in the per share exercise price shall
be required unless such adjustment would require an increase or decrease in the
Purchase Price of at least $0.01, provided, however, that any adjustments which
by reason of this paragraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 2 shall be made to the nearest cent or to the nearest 1/lOOth of a
share, as the case may be.
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(d) Price Reduction. Notwithstanding any other provision set forth in this
Warrant, at any time and from time to time during the period that this Warrant
is exercisable, the Company in it sole discretion may reduce the Purchase Price
or extend the period during which this Warrant is exercisable.
(e) No Impairment. The Company will not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company but will at all times in good
faith assist in the carrying out of all the provisions of this Section 2 and in
the taking of all such actions as may be necessary or appropriate in order to
protect against impairment of the rights of Registered Holder to adjustments in
the Purchase Price.
(f) Notice of Adjustment. Upon any adjustment of the Purchase Price or
extension of the Warrant exercise period, the Company shall forthwith give
written notice thereto to Registered Holder describing the event requiring the
adjustment, stating the adjusted Purchase Price and the adjusted number of
shares purchasable upon the exercise hereof resulting from such event, and
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
3. Fractional Shares. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall make an adjustment
thereof in cash on the basis of the last sale price of the Warrant Shares on the
over-the-counter market as reported by Nasdaq or on a national securities
exchange on the trading day immediately prior to the date of exercise, whichever
is applicable, or if neither is applicable, then on the basis of the then fair
market value of the Warrant Shares as shall be reasonably determined by the
Board of Directors of the Company.
4. Limitation on Sales. Each holder of this Warrant acknowledges that this
Warrant and the Warrant Shares, as of the date of original issuance of this
Warrant, have not been registered under the Securities Act of 1933, as amended
("Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise
in the absence of (a) an effective registration statement under the Act as to
this Warrant or such Warrant Shares or (b) an opinion of counsel, satisfactory
to the Company, that such registration and qualification are not required. The
Warrant Shares issued upon exercise thereof shall be imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE
4
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS."
5. Certain Dividends. If the Company pays a dividend or makes a
distribution on the Common Stock ("Dividend"), other than a cash dividend or a
stock dividend payable in shares of Common Stock, then the Company will pay or
distribute to Registered Holder, upon the exercise hereof, in addition to the
Warrant Shares purchased upon such exercise, the Dividend which would have been
paid to such Registered Holder if it had been the owner of record of such
Warrant Shares immediately prior to the date on which a record is taken for such
Dividend or, if no record is taken, the date as of which the record holders of
Common Stock entitled to such Dividend are determined.
6. Registration Rights of Registered Holder. The Company and Registered
Holder have entered into a Registration Rights Agreement, dated the date hereof,
with respect to the Warrant Shares, pursuant to which the Company has agreed to
use its reasonable best efforts to prepare and file a Registration Statement
under the Act ("Registration Statement") with the Securities and Exchange
Commission and in such states as shall be reasonably specified by Registered
Holder registering for reoffer and resale the Warrant Shares no later than
September 30, 1997.
7. Notices of Record Date. In case:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of any class or any other securities,
or to receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or
any transfer of all or substantially all of the assets of the Company, or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
5
then, and in each such case, the Company will mail or cause to be mailed to
Registered Holder a notice specifying, as the case may be, (i) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or securities at the time
deliverable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization' reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least ten (10) days prior to the record date or
effective date for the event specified in such notice, provided that the failure
to mail such notice shall not affect the legality or validity of any such
action.
8. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Common Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. The Company
shall apply for listing, and obtain such listing, for the Warrant Shares on The
Nasdaq Stock Market and each exchange on which the Common Stock is listed, at
the earliest time that such listing may be obtained in accordance with the rules
and regulations of The Nasdaq Stock Market and the exchange and maintain such
listing until the seventh anniversary of the date of original issuance of this
Warrant.
9. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
10. Transfers. etc.
(a) The Company will maintain a register containing the names and address
of Registered Holder. Registered Holder may change its address as shown on the
warrant register by written notice to the Company requesting such change.
(b) Until any transfer of this Warrant is made in the warrant register,
the Company may treat Registered Holder as the absolute owner hereof for all
purposes, provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
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11. No Rights as Stockholder. Until the exercise of this Warrant,
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.
12. Successors. The rights and obligations of the parties to this Warrant
will inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, assigns, pledgees, transferees and purchasers.
Without limiting the foregoing, the registration rights set forth in this
Warrant shall inure to the benefit of Registered Holder and Registered Holder's
successors, heirs, pledgees, assignees, transferees and purchasers of this
Warrant and the Warrant Shares.
13. Change or Waiver. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
14. Headings. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
15. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York as such laws are applied to
contracts made and to be fully performed entirely within that state between
residents of that state.
16. Jurisdiction and Venue. The Company and Registered Holder (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Warrant shall be instituted exclusively in New York State Supreme Court, County
of New York or in the United States District Court for the Southern District of
New York, (ii) waives any objection to the venue of any such suit, action or
proceeding and the right to assert that such forum is not a convenient forum for
such suit, action or proceeding, and (iii) irrevocably consent to the
jurisdiction of the New York State Supreme Court, County of New York, and the
United States District Court for the Southern District of New York in any such
suit, action or proceeding, and the Company and Registered Holder further agree
to accept and acknowledge service or any and all process which may be served in
any such suit, action or proceeding in New York State Supreme Court, County of
New York or in the United States District Court for the Southern District of New
York and agrees that service of process upon it mailed by certified mail to its
address shall be deemed in every respect effective service of process upon it in
any suit, action or proceeding.
17. Mailing of Notices. etc. All notices and other communications under
this Warrant (except payment) shall be in writing and shall be sufficiently
given if delivered to the addressees in person, by Federal Express or similar
receipt delivery,
7
by facsimile delivery or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
to Registered Holder:
to the Company: Milestone Scientific Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Morse, Zelnick, Rose & Lander LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any of them, by notice to the other may designate
from time to time. Time shall be counted to, or from, as the case may be, the
delivery in person or by mailing.
MILESTONE SCIENTIFIC INC.
By:
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
8
EXHIBIT I
NOTICE OF EXERCISE
TO: Milestone Scientific Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
1. The undersigned hereby elects to purchase shares of the Common Stock of
Milestone Scientific Inc., pursuant to terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full, together
with all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said shares of
the Common Stock in the name of the undersigned or in such other name as is
specified below.
3. The undersigned represents that it will sell the shares of Common Stock
pursuant to an effective Registration Statement under the Securities Act of
1933, as amended, or an exemption from registration thereunder.
(Name)
(Address)
(Taxpayer Identification Number)
[print name of Registered Holder]
By:
Title:
Date:
9