PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement") is made as of January 31, 2000
between MILESTONE SCIENTIFIC INC., a Delaware corporation, with its principal
offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and the undersigned (each a "Purchaser" and, collectively, the
"Purchasers").
WHEREAS, the Company is offering to sell an aggregate of $1,000,000 face
amount of its 10% Senior Secured Notes (the "Notes") and warrants to purchase
100,000 shares of Common Stock (the "Warrants"), substantially in the form
annexed hereto as Exhibits A and B, respectively; and
WHEREAS, the Company desires to sell to Purchaser and Purchaser desires to
purchase Notes having a principal amount as is set forth on the signature page
hereof and Warrants at the rate of Warrants for 142.857 shares (rounded to the
nearest whole share) for each 1,000 face amount of the Notes being purchased.
NOW, THEREFORE, in consideration of the premises and the covenants herein
contained, the parties hereto agree as follows:
1. Purchase and Sale of Notes and Warrants.
(a) Subject to the terms and conditions hereinafter set forth,
Purchaser hereby subscribes for and agrees to purchase from the Company
(i) Notes having the principal amount set forth on the signature
page hereto and
(ii) Warrants at the rate of Warrants for 142.857 shares (rounded
to the nearest whole share) for each 1,000 face amount of the
Notes.
The Company hereby agrees to sell Notes and Warrants in such amounts to
Purchaser.
(b) The purchase price for the Notes and Warrants shall be an amount
equal to 100% of the stated principal amount of the Notes (the "Purchase
Price"). The Purchase Price is payable by certified or bank check made payable
to the Company or by wire transfer of funds, contemporaneously with the
execution and delivery of this Agreement. The Notes and Warrants being purchased
by Purchaser will be delivered by the Company on the Closing Date (as defined
below).
2. Terms of the Notes and Warrants. Except as otherwise set forth in this
Agreement, the terms of the Notes and Warrants shall be as set forth in the
Notes and Warrants, respectively.
3. Closing. The closing of the transactions contemplated hereby
("Closing") shall take place on a date (the "Closing Date") within three (3)
business days following the satisfaction of the conditions set forth herein and
at such times as shall be determined by the Company at the offices of Morse,
Zelnick, Rose & Lander, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser, which representations and warranties shall
be true and correct as of the date hereof and as of the Closing Date, as
follows:
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4.1 Organization; Standing and Power. The Company and its
subsidiaries (a) are corporations duly organized, existing and in good
standing under the laws of the state of their incorporation, (b) have all
requisite corporate power and authority to own its properties and to carry
on their businesses as now conducted and as proposed hereafter to be
conducted, (c) are duly qualified to do business as foreign corporations
in each and every jurisdiction where such qualification is necessary
except where the failure to so qualify would not have a material adverse
effect on the financial condition, business, operations, assets or
prospects of the Company and its subsidiaries as a whole and (d) the
Company has all requisite corporate power and authority to execute and
deliver, and perform all of its obligations under this Agreement.
4.2 Capitalization. The total authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock and no shares of
preferred stock. As of November 30, 1999, the Company has outstanding
8,817,882 shares of Common Stock. In addition, there are 1,000,000 shares
of Common Stock reserved for issuance under the Company's 1997 Stock
Option Plan of which 778,000 shares are issuable pursuant to the exercise
of outstanding stock options ranging in exercise price from $1.00 to
$23.00 per share. The Company also has outstanding other compensatory
options for 136,000 shares with exercise prices ranging from $5.125 to
$23.00 per share and warrants and options in connection with financing
transactions for 197,231 shares at exercise prices ranging from $4.72 to
$9.00 per share of Common Stock. Except as set forth in this Section 4.2
and except for the 3% Senior Convertible Notes, the Company does not have
outstanding any securities convertible into or exchangeable for any shares
of capital stock or any rights (preemptive or otherwise) to subscribe for
or to purchase, or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, any capital stock
or any stock or securities convertible into or exchangeable for any
capital stock.
4.3 Authorization. The execution, delivery and performance by the
Company of its obligations under this Agreement has been duly authorized
by all requisite corporate action and will not, either prior to or as a
result of the consummation of the transactions contemplated by this
Agreement: (a) violate any law, any order of any court or other agency of
government, any provision of the Certificate of Incorporation or Bylaws of
the Company or any contract, indenture, agreement or other instrument to
which the Company is a party, or by which the Company or any of its assets
or properties are bound, or (b) be in conflict with, result in a breach
of, or constitute (after the giving of notice or lapse of time or both) a
default under, or result in the creation or imposition of any lien of any
nature whatsoever upon any of the property or assets of any Company
pursuant to, or result in the acceleration of, any such contract,
indenture, agreement or other instrument. The Company is not required to
obtain any government approval, consent or authorization from, or to file
any declaration or statement with, any governmental instrumentality or
agency in connection with or as a condition to the execution, delivery or
performance of any of this Agreement other than the filings which have
heretofore been made. This Agreement is valid, binding and enforceable
against the Company in accordance with its terms.
4.4 Non-contravention. To the best of its knowledge, the Company is
not in violation or breach of or in default with respect to, complying
with any material provision of any contract, agreement, instrument, lease,
license, arrangement or understanding to which it is a party, and each
such contract, agreement, instrument, lease, license, arrangement and
understanding is in full force and effect and is the legal, valid and
binding obligation of the Company enforceable as to the Company in
accordance with its terms (subject to applicable
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bankruptcy, insolvency and other laws affecting the enforceability of
creditors' rights generally and to general equitable principals). Neither
the execution and the delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or
court to which the Company is subject or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Company is a party or by
which the Company is bound or to which any of the Company's assets are
subject.
4.5 Litigation. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency
now pending or, to the knowledge of the Company, threatened in writing
against the Company, or any of its assets, which, if adversely determined,
might reasonably be expected to have a material adverse effect on the
Company's business, operations and financial condition, other than as
disclosed in its Quarterly Report on Form 10-QSB for the periods ended
September 30, 1999.
4.6 SEC Filings. The information set forth in the Form 10-KSB for
the year ended December 31, 1998 and Form 10-QSB for the nine month period
ended September 30, 1999 (collectively, the "SEC Filings") as filed by the
Company with the Securities and Exchange Commission (the "SEC") is true,
correct and complete in all material respects as of the respective date of
each such filing and does not omit to state any material fact necessary in
order to make the statements therein not misleading. The financial
statements of the Company as set forth in the SEC Filings have been
prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby and fairly present in all material respects
the financial condition and results of operations of the Company as of
their respective dates. Since September 30, 1999, there has not been any
material adverse change in the business, financial condition or results of
operations of the Company except that the Company has continued to operate
at a loss. Except for the liabilities set forth in the financial
statements included in the SEC Filings and liabilities which have arisen
after September 30, 1999 in the ordinary course of business, the Company
has no material liability.
4.7 Due Authorization. The issuance of the Notes has been duly
authorized by all necessary corporate action and when issued will be the
legal and binding obligations of the Company enforceable in accordance
with their terms. The shares of Common Stock issuable upon exercise of the
Warrants or in respect of interest payable on the Notes have been duly
authorized and reserved for issuance and, when issued in accordance with
the terms of the Warrants or issued in respect of interest payable on the
Notes, as applicable, will be fully paid and non-assessable, free and
clear of any restrictions on transfer (other than any restrictions under
the Securities Act of 1933, as amended (the "Securities Act") and state
securities laws), taxes, security interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands.
4.8 Securities Law Exemption. Assuming the accuracy of Purchaser's
representations and warranties set forth herein, the sale of the Notes and
Warrants pursuant to this Agreement has been made in accordance with the
provisions and requirements of Regulation D ("Regulation D") or ss.4(6)
under the Securities Act and any applicable state law.
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4.9 Use of Proceeds. The proceeds from the sale of the Notes and
Warrants will be used for working capital.
4.10 Compliance with Laws. The Company is in compliance in all
material respects with all occupational safety, health, wage and hour,
employment discrimination, environmental, flammability, labeling, usury
and other applicable laws which are material to its businesses, and the
Company is not aware of any state of facts, events, conditions or
occurrences which may now or hereafter constitute or result in a violation
of any of such applicable laws, or which may give rise to the assertion of
any such violation, the effect of which could have a material adverse
effect on the Company's business, operations and financial condition.
4.11 Licenses and Permits. The Company has obtained all federal,
state and local licenses and permits required to be maintained in
connection with and material to its operations, and all such licenses and
permits obtained are valid and in full force and effect.
4.12 Existing Registration Rights. Except for the Registration
Rights Agreement referred to in Section 7 hereof and the registration
rights given to the holders of the Company's 3% Senior Convertible Notes,
the Company is not a party to any agreement under which it is obligated to
register any of its securities under the Securities Act.
4.13 Patents, Trademarks, Copyrights, Etc. The Company owns or
validly licenses all patents, patent rights, patent applications,
licenses, shop rights, trademarks, trademark applications, tradenames,
copyrights and other proprietary information (collectively "Rights") used
in the conduct of its business as currently being conducted. To the actual
knowledge of the Company, the conduct of its business as currently being
conducted does not conflict with valid rights of others in any way, nor
has any material use been made of the Rights, except by the Company or by
other entities duly licensed to use the same.
4.14 No Other Representations. The Company shall not be deemed to
have made any representations, warranties, covenants, agreements or
indemnifications pertaining to the subject matter of this Agreement,
whether express or implied, except to the extent that such
representations, warranties, covenants, agreements or indemnifications are
made in this Agreement or the Schedules hereto or in any certificate or
other agreement, document or instrument delivered pursuant to the
provisions of this Agreement.
5. Representations and Warranties of the Purchasers. The Purchaser hereby
represents and warrants to the Company, which representations and warranties
shall be true and correct as of the date hereof and the Closing Date, as
follows:
5.1 Authorization of Agreement. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
action on the part of Purchaser, does not violate any laws or regulations
applicable to Purchaser and is the valid binding and enforceable
obligation of Purchaser in accordance with its terms.
5.2 Non-contravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which Purchaser is
subject or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any
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party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which Purchaser is a party or by which Purchaser is
bound or to which any of Purchaser's assets are subject.
5.3 Accredited Investor. Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of the Securities Act, and the rules
promulgated thereunder.
5.4 Investment. Purchaser acknowledges that this offering of Notes
and Warrants has not been reviewed by the United States Securities and
Exchange Commission ("SEC") and that the sale of the Notes and Warrants
pursuant hereto is intended to be a nonpublic offering pursuant to
Sections 4(2), 4(6) or 3(b) of the Securities Act. Purchaser represents
that the Notes or Warrants are being purchased for his own account, for
investment and not for distribution or resale to others. Purchaser agrees
that Purchaser will not sell or otherwise transfer the Notes, Warrants or
the shares of the Common Stock issuable upon exercise of the Warrants
unless such securities, as the case may be, are registered under the
Securities Act or unless an exemption from such registration is available.
Purchaser understands that neither the Notes, Warrants nor the shares of
Common Stock issuable upon exercise of the Warrants have been registered
under the Securities Act and they are or will be issued pursuant to a
specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the
investment intent as expressed herein.
5.5 Access to Data. Purchaser has been given copies of the SEC
Filings and has had an opportunity to review same. Purchaser has had an
opportunity to discuss the SEC Filings and the Company's business,
management and financial affairs with the Company's management and the
opportunity to review the Company's facilities, each to Purchaser's
satisfaction. Purchaser understands that such discussions, as well as any
written information issued or provided by the Company, were intended to
describe the aspects of the Company's business and prospects which the
Company believes to be material but were not necessarily a thorough or
exhaustive description thereof.
5.6 Speculative Nature of Investment. Purchaser acknowledges that
the purchase of the Notes and Warrants involves a high degree of risk and
that (i) an investment in the Company is highly speculative and only
investors who can afford the loss of their entire investment should
consider investing in the Company and purchasing Notes and Warrants; (ii)
Purchaser may not be able to liquidate his investment; (iii)
transferability of the Notes, Warrants and the shares of Common Stock
issuable upon exercise of the Warrants is extremely limited; and (iv)
Purchaser could sustain the loss of his entire investment.
5.7 Experience. Purchaser acknowledges that he has prior investment
experience, including investment in non-listed and non-registered
securities, or has employed the services of an investment advisor,
attorney or accountant to review all of the documents furnished or made
available by the Company and to evaluate the merits and risks of such an
investment on Purchaser's behalf.
5.8 Lack of Liquidity. Purchaser understands that there is no public
market for the Notes or Warrants.
5.9 Legends. Purchaser consents to the placement of a legend on the
Notes, Warrants, and shares of Common Stock issued on exercise of the
Warrants, provided they are not
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then covered by an effective Registration Statement, all as set forth in
Section 6 of this Agreement.
5.10 Address. Purchaser hereby represents that the address of
Purchaser furnished by him at the end of this Agreement is Purchaser's
principal residence if Purchaser is an individual or Purchaser's principal
business address if it is a corporation or other entity.
5.11 Registered Representative. Purchaser acknowledges that if he is
a Registered Representative of a National Association of Securities
Dealers, Inc. ("NASD") member firm, he must give such firm the notice
required by the NASD Conduct Rules, or any applicable successor rules of
the NASD receipt of which must be acknowledged by such firm on the
signature page hereof.
5.12 No Other Representations. Purchaser hereby represents that,
except as set forth herein, no representations or warranties have been
made to the Purchaser by the Company or any agent, employee or affiliate
of the Company and in entering into this transaction, Purchaser is not
relying on any information, other than that contained herein, that
contained in the SEC Filings and the results of independent investigation
by the Purchaser. The Purchaser shall not be deemed to have made any
representations, warranties, covenants, agreements or indemnifications
pertaining to the subject matter of this Agreement, whether express or
implied, except to the extent that such representations, warranties,
covenants, agreements or indemnifications are made in this Agreement or
the Schedules hereto or in any certificate or other agreement, document or
instrument delivered pursuant to the provisions of this Agreement.
5.13 Purpose. If Purchaser is a partnership, corporation, trust or
other entity, it was not formed for the purpose of investing in the
Company.
5.14 No Broker. There is no firm, corporation, agency or other
entity or person that is entitled to a finder's fee or any type of
commission in relation to or in connection with the transactions
contemplated by this Agreement as a result of any agreement or
understanding with Purchaser or any of its directors, officers, employees
or agents.
6. Legends. The Notes and Warrants shall be endorsed with the
following legend:
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL (I) A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") SHALL
HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (II) RECEIPT BY THE COMPANY
OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE
SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN
EXCHANGE FOR THIS NOTE.
THIS SECURITY IS SUBJECT TO THE TERMS OF A PURCHASE AGREEMENT, DATED AS OF
JANUARY 31, 2000, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
MILESTONE SCIENTIFIC INC.
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7. Registration Rights. The Company and the Purchaser will enter into a
registration rights agreement, substantially in the form annexed hereto as
Exhibit C.
8. Confidentiality. Purchaser covenants and agrees that none of Purchaser,
his agents and representatives will use for their own benefit, convey or
disclose to any third party any information provided by the Company concerning
its current or proposed business, operations and financial conditions, other
than information which is already publicly available, was already known to
Purchaser or is obtained from a source other than the Company and to the extent
required by law.
9. Covenants.
9.1 Affirmative Covenants of the Company. The Company covenants and
agrees that, from the date hereof and until the Notes have been paid in
full, it shall:
(a) Corporate. Do or cause to be done all things necessary to
at all times (a) other than mergers solely among the Company and any
of its subsidiaries, preserve, renew and keep in full force and
effect its corporate existence, patents, trademarks, rights,
licenses, permits and franchises, (b) comply with this Agreement,
(c) maintain and preserve all of its material property used or
useful in the conduct of their respective businesses, and (d) comply
with all applicable laws material to its businesses, including the
reporting requirements of the Securities Exchange Act of 1934,
whether now in effect or hereafter enacted, promulgated or issued.
(b) Notice of Proceedings. Give prompt written notice to the
Purchaser of any proceeding instituted against the Company in any
federal or state court or before any commission or other regulatory
body, whether federal, state or local, which, if adversely
determined, could have a material adverse effect upon their
business, operations, properties, assets or condition, financial or
otherwise when taken as a whole.
(c) Books and Records; Inspection. Maintain true and accurate
books and records respecting all of their business operations, and
permit agents or representatives of the Purchasers to inspect, at
any time during normal business hours, upon reasonable notice, and
without undue material disruption of their business operations, all
of such books and records and to visit the properties and operations
of the Company and consult with the employees and officers of the
Company.
(d) Notice of Default or Material Adverse Change. Promptly
advise the Purchaser of any event which could have a material
adverse effect on the Company's business, operation, property,
assets or condition, financial or otherwise, or the existence or
occurrence of any Event of Default (as defined in the Notes), any
breach of this Section 9.1 or Section 9.2 or any default of the
Company under any agreement or instrument to which it is a party.
(e) Notice of Filings with SEC. Promptly advise the Purchaser
of any filing of a registration statement under the Securities Act
with the SEC covering any of the Company's securities.
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(f) Delivery of Financial Statements and other Reports. The
Company will deliver to each holder of Notes promptly upon
transmission thereof, copies of all financial statements,
information circulars, proxy statements and reports as the Company
shall send to its stockholders and copies of all registration
statements, prospectuses and all reports which it shall file with
the Securities and Exchange Commission or with any securities
exchange on which any of its securities is listed or with NASDAQ and
copies of all press releases and other statements made available to
the public concerning material developments in the business of the
Company.
(g) Stock to be Reserved. The Company covenants that all
shares of Common Stock that may be issued upon exercise of the
Warrants or in respect of interest payable on the Notes will, upon
issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance
thereof. The Company covenants that during the period in which the
Warrants are outstanding it will at all times have authorized and
reserved a sufficient number of shares of Common Stock to permit the
exercise of the Warrants.
9.2 Negative Covenants of the Company. The Company covenants and
agrees that, until the Notes have been paid in full, unless the holders of
Notes representing more than 50% of the aggregate principal amount of the
Notes (the "Requisite Majority") shall otherwise consent in writing, the
Company shall not directly or indirectly:
(a) Restrictions on Debt and Certain Payments. Incur, create,
assume or suffer to exist any indebtedness that shall be senior to
or pari passu with (in right of payment) the Notes other than: (i)
any purchase money obligations incurred by the Company in connection
with the purchase of property in the ordinary course of business;
(ii) all payment obligations of the Company pursuant to any
capitalized lease entered into by the Company; (iii) all payables
incurred by the Company in the ordinary course of its business; and
(iv) the Company's 3% Senior Convertible Notes. The Company will not
prepay any indebtedness or redeem any securities junior to, or pari
passu with, the Notes.
(b) Restrictions on Liens. Create, assume or suffer to exist
any lien upon any of its property or assets except (i) liens for
taxes which are not yet due or are being contested in good faith,
(ii) statutory liens of landlords and liens of carriers,
warehousemen, mechanics and materialmen incurred in the ordinary
course of business and (iii) liens made through purchase money
security interests in the ordinary course of business.
(c) Registration and other Rights. Enter into any agreement
with respect to its securities which is contrary to or inconsistent
with the rights granted to the holders of Notes in the Registration
Rights Agreement, this Agreement,the Notes or the Warrants.
10. Conditions Precedent to the Obligations of the Company. The
obligations of the Company pursuant to this Agreement are subject to the
satisfaction at the Closing of each of the following conditions; provided,
however, that the Company may, in its sole discretion, waive any of such
conditions and proceed with the transactions contemplated hereby.
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10.1 Accuracy of Representations and Warranties. The representations
and warranties of the Purchaser contained in this Agreement or in any
document or certificate delivered in connection with the transactions
contemplated hereby shall be true and correct in all material respects on
and as of the Closing Date, as if made on and as of the Closing Date.
10.2 Performance of Agreements. Each Purchaser shall have duly
executed and delivered this Agreement to the Company and shall have
performed and complied in all material respects with all covenants,
obligations and agreements to be performed or complied with by any of them
on or before the Closing Date pursuant to this Agreement.
11. Conditions Precedent to the Obligations of the Purchasers. The
obligations of a Purchaser under this Agreement is subject to the satisfaction
at the Closing of each of the following conditions; provided, however, that a
Purchaser may, in such Purchaser's sole discretion, waive any of such conditions
and proceed with the transactions contemplated hereby.
11.1 Accuracy of Representations and Warranties. The representations
and warranties of the Company contained in this Agreement or in any
document or certificate delivered in connection with the transactions
contemplated hereby shall be true and correct in all material respects on
and as of the Closing Date, as if made on and as of the Closing Date.
11.2 Performance of Agreements. The Company shall have duly executed
and delivered this Agreement and the Registration Rights Agreement and
shall have performed and complied in all material respects with all
covenants, obligations and agreements to be performed or complied with by
it on or before the Closing Date pursuant to this Agreement.
11.3 Litigation, Material Changes, Defaults, etc. No claim, action,
suit, proceeding, arbitration or hearing or notice of hearing shall be
pending (and no action or investigation by any governmental authority
shall be threatened) which seeks to enjoin, prevent or adversely affect
the consummation of the transactions contemplated by this Agreement. There
shall not have been any changes in the business of the Company which have
or could reasonably be expected to have a material adverse effect on the
business, operations, properties, assets or condition, financial or
otherwise, of the Company. There shall exist no defaults under the
provisions of any instrument evidencing indebtedness of the Company.
11.4 Officers and Secretary's Certificate. The Purchaser shall have
received a certificate of the chief executive officer and the chief
financial officer of the Company, dated the Closing Date, certifying as to
the fulfillment of the conditions set forth in Sections 11.1, 11.2 and
11.3 and a certificate of the Company's Secretary certifying copies of the
Company's Certificate of Incorporation, By-laws and all resolutions
authorizing the transactions contemplated herein and certifying as to the
incumbency of officers executing this Agreement and any related document.
11.5 Good Standing Certificates. The Purchaser shall have received
(a) "good standing" certificate with respect to the Company from the
Secretary of State of Delaware stating that the Company is duly
incorporated and in good standing in Delaware, and (b) a certificate from
the Secretary of State of New Jersey to the effect that the Company is
duly qualified to do business in New Jersey as a foreign corporation.
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11.6 Legal Opinion. The Purchaser shall have received an opinion
from counsel to the Company substantially in the form annexed hereto as
Exhibit C.
11.7 Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes and Warrants shall not be prohibited by any
applicable law or governmental regulation (including without limitation
Regulations G, T and X of the Board of Governors of the Federal Reserve
System) and shall not subject the holders of the Notes and Warrants to any
tax, penalty or liability under any applicable law or governmental
regulation.
11.8 Simultaneous Closing. The Purchaser shall be required to close
only if the Company simultaneously closes on the sale of Notes in the
aggregate face amount of $700,000 and Warrants at the rate set forth in
Section 1(a).
12. General Provisions.
12.1 Survival of Representations, Warranties, Covenants, and
Agreements. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the execution of this Agreement.
12.2 Notices. All notices, requests, demands and other
communications which are required to be or may be given under this
Agreement to any party to any of the other parties shall be in writing and
shall be deemed to have been duly given when (a) delivered in person, (b)
the day following dispatch by an overnight courier service (such as
Federal Express or UPS, etc.) or (c) five (5) days after dispatch by
certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made. Any notice
or other communication given hereunder shall be addressed to the Company,
at its principal offices as set forth above and to the Purchaser at his
address indicated on the signature page hereto.
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.4 Headings. All headings are inserted for convenience of
reference only and shall not affect the meaning or interpretation of any
such provisions or of this Agreement, taken as an entirety.
12.5 Severability. If and to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this Agreement
to be invalid or unenforceable, such holding shall in no way affect the
validity of the remainder of this Agreement.
12.6 Changes, Waivers, Etc. Subject to Section 12.11, neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but rather may only be changed by a statement in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. It is agreed that a waiver by
either party of a breach of any provision of this Agreement shall not
operate, or be construed, as a waiver of any subsequent breach by that
same party.
12.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The
parties hereby agree that any dispute
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which may arise between them arising out of or in connection with this
Agreement shall be adjudicated before a court located in New York City and
they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts
in the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection
they now or hereafter may have respecting the venue of any such action or
proceeding brought in such a court or respecting the fact that such court
is an inconvenient forum, relating to or arising out of this Agreement or
any acts or omissions relating to the sale of the securities hereunder,
and consent to the service of process in any such action or legal
proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth below or such other address as
the undersigned shall furnish in writing to the other.
12.8 Binding Effects. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors,
legal representatives and assigns.
12.9 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter
thereof and incorporates and supersedes all prior discussions, agreements
and understandings of any and every nature among them.
12.10 Further Assurances. The parties agree to execute and deliver
all such further documents, agreements and instruments and take such other
and further action as may be necessary or appropriate to carry out the
purposes and intent of this Agreement.
12.11. Waivers and Amendments. With the written consent of the
Requisite Majority, the obligations of the Company under this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), and with the same consent the Company may
enter into a supplementary agreement for the purpose of adding any
provisions to this Agreement or to any supplemental agreement or modifying
in any manner the rights and obligations of the holders of the Notes and
of the Company; provided, however, that no such waiver or supplemental
agreement shall reduce the aforesaid percentage of holders of the Notes
who are required to consent to any waiver or supplemental agreement
without the consent of all of the holders of the Notes. Notwithstanding
anything to the contrary above, the payment of interest, time of payment
of interest, the interest rate payable, payment of principal and time of
payment of principal on the Notes may not be changed without the written
consent of holders then holding at least 80% of the outstanding principal
amount of the Notes, and this provision may not be waived or amended
without the written consent of holders then holding at least 80% of the
outstanding principal amount of the Notes. Written notice of any such
waiver, consent or agreement of amendment, modification or supplement
shall be given by the Company to holders of the Notes who have not
previously consented thereto in writing.
12.12. Expenses. Each party hereto shall pay all of its own fees and
expenses in connection with the transactions contemplated hereby;
provided, however, the Company shall pay the legal fees incurred by
Purchasers to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated hereby to the extent such legal fees do not
exceed $15,000 in the aggregate, plus the disbursements of such legal
counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
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MILESTONE SCIENTIFIC INC.
By: _____________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇, Chairman and
Chief Executive Officer
PURCHASER:
____________________________________
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