<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _________)*
MILESTONE SCIENTIFIC INC.
-------------------------
(NAME OF ISSUER)
COMMON STOCK, $.001 PAR VALUE
-----------------------------
(TITLE OF CLASS OF SECURITIES)
59935P100
---------
(CUSIP NUMBER)
RICHARD J. LAMPEN
EXECUTIVE VICE PRESIDENT & GENERAL COUNSEL
NEW VALLEY CORPORATION
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FL 33131
(305) 579-8000
---------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
SEPTEMBER 9, 1997
------------------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ] .
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 50 Pages
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CUSIP NO. 59935P100 PAGE 2 OF 50 PAGES
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<S> <C> <C> <C>
Name of Reporting Person
21 S.S. or I.R.S. Identification No. of Above Person
NEW VALLEY CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a)[ ]
(b)[X]
- ---------------------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ---------------------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions) WC
- ---------------------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
=================================================================================================================================
7 Sole Voting Power
740,000 (including 240,000 acquirable within 60 days upon exercise of Warrants)
---------------------------------------------------------------------------------------------------------
8 Shared Voting Power
- 0 -
---------------------------------------------------------------------------------------------------------
Number of Shares 9 Sole Dispositive Power
Beneficially Owned by 740,000 (including 240,000 acquirable within 60 days upon exercise of Warrants)
Each Reporting
Person With
---------------------------------------------------------------------------------------------------------
10 Shared Dispositive Power
- 0 -
=================================================================================================================================
11 Aggregate Amount Beneficially Owned by Each Reporting Person
740,000 (including 240,000 acquirable within 60 days upon exercise of Warrants)
- ---------------------------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
[ ]
- ---------------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
9.9%
- ---------------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO
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<TABLE>
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CUSIP NO. 59935P100 PAGE 3 OF 50 PAGES
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<S> <C> <C> <C>
Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
NEW VALLEY HOLDINGS, INC.
- ---------------------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
- ---------------------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ---------------------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions) N/A
- ---------------------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
- 0 -
---------------------------------------------------------------------------------------------------------
8 Shared Voting Power
- 0 -
---------------------------------------------------------------------------------------------------------
Number of Shares 9 Sole Dispositive Power
Beneficially Owned by - 0 -
Each Reporting
Person With
---------------------------------------------------------------------------------------------------------
10 Shared Dispositive Power
- 0 -
=================================================================================================================================
11 Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
- ---------------------------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
[X]
- ---------------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0%
- ---------------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO; HC
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<S> <C> <C> <C>
Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BGLS INC.
- ----------------------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a)[ ]
(b)[X]
- ----------------------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ----------------------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions) N/A
- ----------------------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
==================================================================================================================================
7 Sole Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
8 Shared Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
Number of Shares 9 Sole Dispositive Power
Beneficially Owned by
Each Reporting
Person With - 0 -
----------------------------------------------------------------------------------------------------------
10 Shared Dispositive Power
- 0 -
==================================================================================================================================
11 Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
- ----------------------------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
[X]
- ----------------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0%
- ----------------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO; HC
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<S> <C> <C>
Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BROOKE GROUP LTD.
- ----------------------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a)[ ]
(b)[x]
- ----------------------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ----------------------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions) N/A
- ----------------------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
==================================================================================================================================
7 Sole Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
8 Shared Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
Number of Shares 9 Sole Dispositive Power
Beneficially Owned by - 0 -
Each Reporting
Person With
----------------------------------------------------------------------------------------------------------
10 Shared Dispositive Power
- 0 -
==================================================================================================================================
11 Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
- ----------------------------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
[X]
- ----------------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0%
- ----------------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) CO; HC
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CUSIP NO. 59935P100 PAGE 6 OF 50 PAGES
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<S> <C> <C> <C>
Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BENNETT S. LEBOW
- ----------------------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a)[ ]
(b)[X]
- ----------------------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ----------------------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions) N/A
- ----------------------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
==================================================================================================================================
7 Sole Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
8 Shared Voting Power
- 0 -
----------------------------------------------------------------------------------------------------------
Number of Shares 9 Sole Dispositive Power
Beneficially Owned by
Each Reporting
Person With - 0 -
----------------------------------------------------------------------------------------------------------
10 Shared Dispositive Power
- 0 -
==================================================================================================================================
11 Aggregate Amount Beneficially Owned by Each Reporting Person
- 0 -
- ----------------------------------------------------------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
[x]
- ----------------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0%
- ----------------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions) IN
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<PAGE> 7
ITEM 1. Security and Issuer.
This Schedule relates to the Common Stock, par value $.001 per share
("Common Stock"), of Milestone Scientific Inc., a Delaware corporation (the
"Company"). The address of the principal executive offices of the Company is:
220 South Orange Avenue, Livingston Corporate Park, New Jersey 07039, (201)
535-2717.
ITEM 2. Identity and Background.
(a) This Schedule is being filed by the following persons:
(i) New Valley Corporation ("New Valley"), a Delaware
corporation in which New Valley Holdings, Inc.
("N.V. Holdings") holds approximately 41.5% of the
common stock, and approximately 57.7% of the Class A
Preferred Stock and in which BGLS Inc. ("BGLS")
holds approximately 9.0% of the Class B Preferred
Stock and approximately 0.2% of the common stock;
(ii) N.V. Holdings, a Delaware corporation, which is a
wholly-owned subsidiary of BGLS;
(iii) BGLS, a Delaware corporation, which is a
wholly-owned subsidiary of Brooke Group Ltd.
("BGL");
(iv) BGL, a Delaware corporation, in which Bennett S.
LeBow is the direct or indirect owner of 52.7% of
the common stock; and
(v) Bennett S. LeBow.
Each of the persons listed in (i) to (v) above is hereinafter referred
to individually as a "Reporting Person" and collectively as the "Reporting
Persons". The Reporting Persons collectively may be deemed to be a group
beneficially owning, in the aggregate, 740,000 shares (including 500,000 shares
acquired by New Valley and 240,000 shares acquirable by New Valley within 60
days upon the exercise of warrants) of Common Stock (such shares and warrants,
together with the Contingent Warrant (as defined below, collectively, the
"Securities") or approximately 9.9% of the outstanding shares of the Common
Stock within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Act").
The filing of this Schedule shall not be construed as an admission
that any Reporting Person is, for purposes of Section 13(d) or 13(g) of the
Act, the beneficial owner of any securities covered by this Schedule except for
the securities stated herein to be beneficially owned by such Reporting Person
or that Bennett S. LeBow is acting with the other Reporting Persons as a group
within the meaning of Section 13(d)(3) of the Act.
(b),(c) New Valley is engaged, through Ladenburg Thalmann & Co. Inc.,
in the investment banking and brokerage business, through BrookeMil Ltd., in
real estate development in Russia, through its New Valley Realty division, in
the ownership and management of commercial real estate in the United States,
and in the acquisition of operating companies.
Page 7 of 50 Pages
<PAGE> 8
BGL is a holding company for a number of businesses. BGL is
principally engaged, through its subsidiary Liggett Group Inc., in the
manufacture and sale of cigarettes in the United States; through its subsidiary
Brooke (Overseas) Ltd., in the manufacture and sale of cigarettes in Russia;
and through its investment in New Valley, in the investment banking and
brokerage business, in real estate development in Russia, in the ownership and
management of commercial real estate in the United States and in the
acquisition of operating companies. BGLS is a holding company for various
businesses of BGL, including N.V. Holdings which holds an approximate 57.7%
interest in New Valley's senior preferred shares and an approximate 42% voting
interest in New Valley. Mr. LeBow is the Chairman of the Board, President and
Chief Executive Officer of BGL, BGLS and N.V. Holdings, and Chairman of the
Board and Chief Executive Officer of New Valley and holds various positions
with BGL's subsidiary companies. A list of directors and, except as otherwise
indicated, executive officers of each of BGL, BGLS, N.V. Holdings and New
Valley is attached hereto as Exhibit A. The principal business address and the
principal office address of each of BGL, BGLS and New Valley and their
respective directors and executive officers and the business address of Mr.
LeBow is 100 S.E. Second Street, Miami, Florida 33131. The principal business
and principal office of N.V. Holdings and, except as otherwise indicated, its
directors and executive officers is 204 Plaza Centre, 3505 Silverside Road,
Wilmington, Delaware 19810.
(d),(e) None of the Reporting Persons, and to the best knowledge of
the Reporting Persons, none of the persons listed in Schedule A, during the
last five years, (1) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors), or (2) was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. LeBow is a citizen of the United States of America, and, to
the best knowledge of the Reporting Persons, each of the persons named in
Schedule A is a citizen of the United States.
ITEM 3. Source and Amount of Funds or Other Consideration.
The aggregate purchase price for the Securities acquired by New Valley
was $3,000,000. New Valley used its own working capital funds to purchase the
Securities.
ITEM 4. Purpose of Transaction.
With respect to all Reporting Persons, the Securities were acquired as
investments. The Reporting Persons intend to monitor the investment in the
Securities on a continuing basis. Any of the Reporting Persons may acquire
additional shares of Common Stock, warrants or other securities of the Company
(subject to availability at prices deemed favorable) in the open market, in
privately negotiated transactions or otherwise. Alternatively, each Reporting
Person reserves the right to dispose or cause the disposal of some or all of
the Securities in the open market, in privately negotiated transactions or
otherwise. In addition, each Reporting Person may purchase or sell options on
securities of the Company and may have a short position in such securities.
The possible activities of the Reporting Persons are subject to change at any
time.
None of the Reporting Persons has any present plans or proposals which
relate or would result in any of the matters set forth in paragraphs (a)
through (j) of Item 4 of Schedule 13D.
Page 8 of 50 Pages
<PAGE> 9
ITEM 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Reporting Persons may be deemed to be
acting as a group, within the meaning of Section 13(d)(3) of the Act,
beneficially owning, in the aggregate, 740,000 shares (including 240,000 shares
acquirable within 60 days upon the exercise of warrants) of Common Stock of the
Company, which constituted approximately 9.9% of the 5,568,152 shares of Common
Stock outstanding as of July 31, 1997 (as reported in the Company's Quarterly
Report on Form 10-QSB for the quarter ended June 30, 1997) plus (i) the 740,000
shares of Common Stock acquired by New Valley or acquirable within 60 days upon
exercise of warrants and (ii) the other 1,166,666 shares of Common Stock which
the Company announced on September 11, 1997 had been issued in a private
placement.
(b) With respect to the 740,000 shares of Common Stock acquired by New
Valley or acquirable within 60 days by New Valley upon exercise of warrants, New
Valley exercises both voting power and dispositive power. Since Mr. LeBow is the
direct or indirect owner of 52.7% of the common stock of BGL, which in turn
controls BGLS, which in turn controls NV Holdings, which in turn holds an
approximate 57.7% interest in New Valley's senior preferred shares and an
approximate 42% voting interest in New Valley, each of these Reporting Persons
may be deemed to exercise both voting power and dispositive power with respect
to such shares.
Under the definition of "beneficial ownership" in Rule 13d-3
promulgated under the Act, each of the Reporting Persons may be deemed to
beneficially own the Securities owned by each other Reporting Person since Mr.
LeBow is the direct or indirect owner of 52.7% of the common stock of BGL,
which in turn owns 100% of the capital stock of BGLS, which in turn owns 100%
of the capital stock of NV Holdings, which in turn holds an approximate 57.7%
interest in New Valley's senior preferred shares and an approximate 42% voting
interest in New Valley. The filing of this Schedule and the disclosure of this
information shall not be construed as an admission that any of the Reporting
Persons other than New Valley is the beneficial owner of any of the Securities
owned by New Valley either for purposes of Section 13(d) of the Act or for any
other purpose, and such beneficial ownership is expressly disclaimed. Under the
aforementioned definition of "beneficial ownership," it is also possible that
members of the Board of Directors of New Valley (including Mr. LeBow), in their
capacities as such, might be deemed to be beneficial owners of the Securities
and share the voting and dispostive powers with regard to the Securities.
Neither the filing of this Schedule nor any of its contents shall be construed
as an admission that the directors of New Valley are beneficial owners of any
of the Securities, either for purposes of Section 13(d) of the Act or for any
other purpose, and such beneficial ownership is expressly disclaimed.
(c) On September 9, 1997, New Valley purchased the Securities from the
Company for $3,000,000. See Item 6. None of the Reporting Persons has effected
any other transactions in the Common Stock in the past 60 days.
(d) No persons other than New Valley have the right to receive or
power to direct the receipt of dividends from, or the proceeds from the sale
of, the Securities.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Page 9 of 50 Pages
<PAGE> 10
On September 9, 1997, New Valley entered into a Stock Purchase
Agreement with the Company (a copy of which is attached hereto as Exhibit B and
is incorporated herein by reference) pursuant to which New Valley purchased the
Securities for $3,000,000. In connection with the Stock Purchase Agreement, on
the same date, New Valley and the Company entered into a Registration Rights
Agreement and the Company delivered to New Valley (i) a Warrant, entitling New
Valley to purchase 240,000 shares of Common Stock, commencing on September 9,
1997 and expiring on September 9, 1999, at a purchase price of $9.00 per share
and (ii) a Contingent Warrant, entitling New Valley to purchase up to 260,000
shares of Common Stock, commencing on the Commencement Date (as defined below)
and expiring on September 9, 1999, at a purchase price of $9.00 per Share. The
"Commencement Date," as defined in the Contingent Warrant, means with respect to
any share of Common Stock issuable upon exercise of the Contingent Warrant the
61st day after the day, if any, on which such Contingent Warrant share, together
with the sum (without duplication) of (i) all other Contingent Warrant shares as
to which the Commencement Date shall have previously occurred and which New
Valley shall not have exercised, (ii) the number of any shares of Common Stock
beneficially owned by New Valley (including any affiliate thereof whose
beneficial ownership would be aggregated with New Valley for purposes of Section
16 of the Act), and (iii) the number of any shares of Common Stock that may then
be received by New Valley upon exercise of the Warrant to purchase 240,000
shares of Common Stock issued to New Valley on September 9, 1997, shall equal
9.9% or less of the total number of shares of Common Stock of the Company then
outstanding as determined in accordance with Section 16 of the Act. Copies of
the Registration Rights Agreement, the Warrant and the Contingent Warrant are
attached hereto as Exhibits C, D and E, respectively, and are incorporated
herein by reference.
ITEM 7. Material to be Filed as Exhibits.
The following documents are attached as exhibits to this Schedule.
Such documents are summarized in this Schedule, but the summaries are not
complete and are qualified in their entirety by reference to the entire
documents attached hereto.
Exhibit A: Executive Officers and Directors of the Reporting Persons.
Exhibit B: Stock Purchase Agreement dated September 9, 1997 between New Valley
and the Company.
Exhibit C: Registration Rights Agreement dated September 9, 1997 between New
Valley and the Company.
Exhibit D: Warrant dated September 9, 1997 to purchase 240,000 shares of
Common Stock.
Exhibit E: Contingent Warrant dated September 9, 1997 to purchase up to
260,000 shares of Common Stock.
Exhibit F: Joint Filing Agreement among the Reporting Persons.
Page 10 of 50 Pages
<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 15, 1997
NEW VALLEY CORPORATION
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
NEW VALLEY HOLDINGS, INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BGLS INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BROOKE GROUP LTD.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
/s/ Bennett S. LeBow
-----------------------------------
Bennett S. LeBow
Page 11 of 50 Pages
<PAGE> 12
EXHIBIT A
EXECUTIVE OFFICERS AND DIRECTORS OF THE REPORTING PERSONS:
The names, present principal occupations or employment and business
addresses of the executive officers and directors of each of the Reporting
Persons are set forth below. If no address is given, the executive officer's or
director's business address is that of the Reporting Person. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
the Reporting Person.
<TABLE>
<S> <C>
Brooke Group Ltd.:
- ------ ----- -----
Name: Present Principal Occupation or Employment; Business Address:
- ---- ------------------------------------------------------------
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Chief Financial Officer and Treasurer
Marc N. Bell Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp., 70 E. Sunrise Hwy.,
Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc., 26 Jefferson St.,
Passaic, NJ 07055
BGLS Inc.:
- ----------
Name: Present Principal Occupation or Employment; Business Address:
- ----- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp., 70 E. Sunrise Hwy.,
Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc., 26 Jefferson St.,
Passaic, NJ 07055
</TABLE>
Page 12 of 50 Pages
<PAGE> 13
<TABLE>
<S> <C>
New Valley Holdings, Inc.:
- --- ------ --------- -----
Name: Present Principal Occupation or Employment; Business Address:
- ---- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp., 70 E. Sunrise Hwy.,
Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc., 26 Jefferson St.,
Passaic, NJ 07055
New Valley Corporation:
- --- ------ ------------
Name: Present Principal Occupation or Employment; Business Address:
- ---- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board and Chief Executive Officer
Howard M. Lorber Director, President and Chief Operating Officer
Richard J. Lampen Director, Executive Vice President and General Counsel
Robert M. Lundgren Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Secretary
Henry C. Beinstein Director; Executive Director, Schulte Roth & Zabel LLP, 900 Third Avenue, New
York, NY 10022
Arnold I. Burns Director; Partner, Proskauer Rose L.P., 1585 Broadway, 23rd Floor, New York, NY
10036
Ronald J. Kramer Director; Chairman and Chief Executive Officer of Ladenburg Thalmann Group Inc.,
590 Madison Avenue, New York, NY 10022
Richard S. Ressler Director; Chairman, Orchard Capital Corporation, 10960 Wilshire Blvd., Suite 500,
West Los Angeles, CA 90024
Barry W. Ridings Director; Managing Director, Alex. Brown & Sons, Incorporated, 1290 Avenue of the
Americas, 10th Floor, New York, NY 10104
</TABLE>
Page 13 of 50 Pages
<PAGE> 14
EXHIBIT B
STOCK PURCHASE AGREEMENT
Agreement entered into on September 9, 1997, by and among New Valley
Corporation, a Delaware corporation (the "Buyer"), and Milestone Scientific
Inc., a Delaware corporation (the "Seller"). The Buyer and the Seller are
referred to collectively herein as the "Parties".
This Agreement contemplates a transaction in which the Buyer will purchase
from the Seller, and the Seller will sell to the Buyer, (i) 500,000 shares (the
"Shares") of Seller's common stock, par value $.001 per share (the "Common
Stock"), and (ii) warrants (the "Warrants") to purchase up to 500,000 shares of
Common Stock (the "Warrant Shares") at an exercise price of $9.00 per share.
The total consideration to be paid by the Buyer for the Shares and the Warrants
is $3,000,000 (the "Purchase Price").
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Applicable Rate" means the prime rate of interest as announced from time
to time by Citibank, N.A., New York, New York.
"Buyer" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Commission" means the United States Securities and Exchange Commission.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
Page 14 of 50 Pages
<PAGE> 15
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Parties" has the meaning set forth in the preface above.
"Purchase Price" has the meaning set forth in the preface above.
"SEC Filings" means Seller's (i) proxy statement dated August 20, 1997;
(ii) Form 10-KSB for the year ended December 31, 1996; and (iii) Form 10-QSB
for the period ended June 30, 1997.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings,
(c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Shares" has the meaning set forth in the preface above.
"Warrants" has the meaning set forth in the preface above.
"Warrant Shares" has the meaning set forth in the preface above.
2. Purchase and Sale of Shares and Warrants.
(a) Basic Transaction. On and subject to the terms and conditions of this
Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees
to sell to the Buyer, the Shares and the Warrants and the Buyer agrees to pay
to the Seller the Purchase Price.
(b) Purchase Price. The Buyer agrees to pay the Purchase Price to the
Seller at the Closing by delivery of cash payable by wire transfer to an
account designated in writing by the Seller.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices
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of Morse, Zelnick, Rose & Lander LLP in New York, New York, commencing at 9:00
a.m. local time on the date hereof or such date and time as the Buyer and the
Seller shall mutually determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) the Seller will deliver
to the Buyer stock certificates representing the Shares and warrant
certificates, substantially in the form annexed hereto as Exhibit A
representing the Warrants,(ii) the Buyer will deliver to the Seller the
Purchase Price,(iii) the Parties will enter into the Registration Rights
Agreement, substantially in the form annexed hereto as Exhibit B and (iv)
counsel for the Seller shall deliver to the Buyer a legal opinion in form and
substance reasonably satisfactory to the Buyer.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer that the statements contained in this Section 3(a)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3(a)).
(i) Organization of Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Seller has full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms
and conditions. The Seller need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government
or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(iii) Noncontravention. 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 Seller is
subject or any provision of its charter or bylaws 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 material agreement,
contract, lease, license, instrument, or other arrangement to which the
Seller is a party or by which it is bound or to which any of its assets is
subject.
(iv) Brokers' Fees. The Seller has no liability or
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obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which
the Buyer could become liable or obligated.
(v) The Shares and the Warrant Shares. The Shares and the Warrant
Shares have been duly authorized and, when issued, will be fully paid and
non-assessable, free and clear of any restrictions on transfer (other than
any restrictions under the Securities Act and state securities laws),
taxes, Security Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands.
(vi) Financial Statements; Undisclosed Liabilities. The Seller has
provided the Buyer with copies of the SEC Filings. The information set
forth in the SEC Filings 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 Seller 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 Seller as of their respective dates. Since
June 30, 1997, there has not been any material adverse change in the
business, financial condition or results of operations of the Seller
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 June 30, 1997 in the
Ordinary Course of Business, the Seller has no material liability.
(vii) Capitalization. The entire authorized capital of the Seller
consists of 10,000,000 shares of Common Stock. As of August 1, 1997,
5,568,152 shares of Common Stock were issued and outstanding and
approximately 1,955,478 shares are issuable upon exercise of outstanding
options and warrants. The Board of Directors of the Seller has authorized
the sale on or before September 15, 1997 of an additional $7 million of
shares of Common Stock and warrants on the same terms and conditions as
the transactions contemplated hereby.
(viii) Securities Law Compliance. The transactions contemplated
hereby comply in all material respects with the requirements of (i)
Section 4(2) of the Securities Act and Regulation D promulgated thereunder
and with the requirements of all other published rules and regulations of
the Commission currently in effect relating to "private offerings" to
"accredited investors" of the type contemplated by the Seller; and (ii)
the securities laws of any state in which the shares and the warrants will
be offered.
(b) Representations and Warranties of the Buyer. The Buyer
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represents and warrants to the Seller that the statements contained in this
Section 3(b) are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3(b)).
(i) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions. The Buyer
need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.
(iii) Noncontravention. 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 Buyer is
subject or any provision of its charter or bylaws 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 Buyer is a
party or by which it is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Seller could
become liable or obligated.
(v) Investment. The Buyer is an Accredited Investor. The Buyer is
not acquiring the Shares, the Warrants or the Warrant Shares with a view
to or for sale in connection with any distribution thereof within the
meaning of the Securities Act.
(vi) SEC Filings. The Buyer has been given copies of the SEC Filings
and has reviewed such SEC Filings. The Buyer has been given the
opportunity to ask questions and receive answers from the Seller
concerning Seller's operations and financial condition and the
transactions contemplated hereby. The Buyer has been provided with all of
the information deemed necessary by the Buyer in connection with the
transactions
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contemplated hereby.
4. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing:
(a) General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at
the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Section 5 below).
(b) Share Certificate and Warrant Certificates. Each warrant certificate
representing the Warrants and, until such time as the Shares and the Warrant
Shares have been duly registered under the Securities Act, each stock
certificate representing the Shares and the Warrant Shares will be imprinted
with a legend substantially in 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 offered, sold,
transferred, pledged, hypothecated, assigned or otherwise disposed of
except pursuant to an effective registration statement under the Act or in
a transaction which is exempt from registration under the Act and any
applicable state securities laws.
5. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the representations
and warranties of the Seller and the Buyer contained in this Agreement shall
survive the Closing hereunder (unless the other party knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing) and
continue in full force and effect for a period of two years thereafter, other
than the representations and warranties contained in Section 3(a)(v), Section
3(a)(viii) and Section 3(b)(vi) which shall survive without limitation.
(b) Indemnification Provisions for Benefit of the Buyer. In the event the
Seller breaches any of its representations, warranties, and covenants contained
herein, provided that the Buyer makes a written claim for indemnification
against the Seller pursuant to Section 6(g) below within such survival period,
then the Seller agrees to indemnify the Buyer from and against the entirety of
any Adverse Consequences the Buyer may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Buyer may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach.
(c) Indemnification Provisions for Benefit of the Seller. In
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the event the Buyer breaches any of its representations, warranties, and
covenants contained herein, provided that the Seller makes a written claim for
indemnification against the Buyer pursuant to Section 6(g) below within the
survival period, then the Buyer agrees to indemnify the Seller from and against
the entirety of any Adverse Consequences the Seller may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences the Seller may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of, or
caused by the breach.
(d) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax consequences and insurance coverage and take
into account the time cost of money (using the Applicable Rate as the discount
rate) in determining Adverse Consequences for purposes of this Section 5. All
indemnification payments under this Section 5 shall be deemed adjustments to
the Purchase Price.
(e) Exclusive Remedy. The Buyer and the Seller acknowledge and agree that
the foregoing indemnification provisions in this Section 5 shall be the
exclusive remedy of the Buyer and the Seller with respect to the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, the Buyer and the Seller hereby waive any statutory, equitable, or
common law rights or remedies.
6. Miscellaneous.
(a) Press Releases and Public Announcements. The Seller and the Buyer may
file such forms with the Commission and issue such press releases and make such
public announcements relating to the transactions contemplated hereby as each
shall determine. The Parties shall cooperate with each other in connection with
any such filing.
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the Buyer or the Seller, as the case may be; provided,
however, that the Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its wholly-owned subsidiaries and (ii) designate
one or more of its wholly-owned subsidiaries to perform
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its obligations hereunder (in any or all of which cases the Buyer nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if delivered to the addresses in
person, by Federal Express or similar receipt delivery, by facsimile delivery
or, if mailed, by certified mail, return receipt requested, as follows:
If to the Seller:
Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Att'n: Mr. Leonard Osser, President
Fax: (201) 535-2829
with a copy to:
Morse, Zelnick, Rose & Lander LLP
450 Park Avenue
New York, new York 10022
Att'n: Stephen Zelnick, Esq.
Fax: (212) 838-9190
If to the Buyer:
New Valley Corporation
100 S.E.2nd Street, 32nd Floor
Miami, Florida 33131
Att'n: Mr. Richard J. Lampen,
Executive Vice President and
General Counsel
Fax: (305) 579-8009
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.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing
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and signed by the Buyer and the Seller. No waiver by either Party of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(m) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
NEW VALLEY CORPORATION
By: /s/ Richard J. Lampen
------------------------------
Richard J. Lampen
Title: Executive Vice President
MILESTONE SCIENTIFIC INC.
By: /s/ Leonard Osser
-----------------------------
Leonard Osser
Title: President
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement") made this 9th day of
September, 1997 by and between Milestone Scientific Inc., a Delaware
corporation (the "Company"), and New Valley Corporation ("NVC"), a Delaware
corporation.
WITNESSETH
WHEREAS, the Company and the NVC have simultaneously herewith entered into
a Stock Purchase Agreement; and
WHEREAS, in connection with the Stock Purchase Agreement, the Company has
agreed to enter into this Registration Rights Agreement with NVC.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
"Securities Act" (as defined herein).
"Common Stock" shall mean the Common Stock, $.001 par value per share, of
the Company, as constituted as of the date of this Agreement.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in Section 5.
"Restricted Stock" shall mean 500,000 shares of Common Stock of the
Company and up to 500,000 shares of Common Stock of the Company underlying the
Warrants which are being sold to NVC pursuant to the Stock Purchase Agreement.
"Securities Act" shall mean the United States Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 5.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement, dated
the date hereof, between the Company and NVC.
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2. Restrictive Legend. Each certificate representing Restricted Stock
shall, except as otherwise provided in this Section 2, be stamped or otherwise
imprinted with a legend substantially in 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 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."
3. Registration. The Company will use its reasonable best efforts (subject
to the provisions of this Agreement) to file with the Commission no later than
September 30, 1997, a registration statement under the Securities Act and any
applicable state securities laws registering for reoffer and resale the
Restricted Stock.
4. Registration Procedures. The Company will, as expeditiously as
possible:
(a) prepare and file with the Commission a registration statement with
respect to such securities (on such applicable form as the Company may in its
sole discretion elect to use) and use its reasonable best efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby, determined as hereinafter provided;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for the
period specified in subsection (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all Restricted Stock covered
by such registration statement in accordance with NVC's intended method of
disposition set forth in such registration statement for such period;
(c) furnish to NVC such number of copies of the registration statement and
the prospectus included therein, including each preliminary prospectus, as NVC
reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its reasonable best efforts to register or qualify the Restricted
Stock covered by such registration statement under the securities or "blue sky"
laws of such jurisdictions as NVC reasonably shall request; provided, however,
that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) immediately notify NVC at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event of which the Company has
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knowledge as a result of which the prospectus contained in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing;
(f) use its reasonable best efforts to include or list, as the case may
be, the Restricted Stock being registered on the automated quotation system of
the National Association of Securities Dealers, Inc. or the principal
securities exchange on which Common Stock of the Company is then quoted or
listed;
(g) afford NVC and its representative, if any, an opportunity to make such
examination and inquiry into the financial position, business and affairs of
the Company and its subsidiaries as NVC or its counsel may reasonably deem
necessary to satisfy NVC and its counsel as to the accuracy and completeness of
the registration statement;
(h) deliver promptly to NVC copies of all correspondence between the
Commission and the Company relating to the registration statement; and
(i) use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement (which in no event
shall require the Company to commence any judicial proceeding).
For purposes of Sections 4(a) and 4(b) above, the period of distribution
of Restricted Stock shall be deemed to extend until the earlier of the sale of
all Restricted Stock covered by the Registration Statement or the seventh
anniversary of the effective date thereof.
In connection with registration hereunder, NVC will furnish to the Company
in writing such information with respect to itself and the proposed
distribution by it as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws.
5. Expenses. All expenses incurred by the Company in complying with
Section 3 above, including without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company and
independent public accountants for the Company, fees and expenses, including
counsel fees, incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and costs of insurance
are called "Registration Expenses." All selling commissions applicable to the
sale of Restricted Stock, including any fees and disbursements of any special
counsel to the sellers of Restricted Stock, are called "Selling Expenses."
The Company will pay all Registration Expenses in connection with the
registration statement. All Selling Expenses shall be borne by NVC.
6. Rule 144 Reporting. With a view to making available to NVC the benefits
of certain rules and regulations of the Commission which may permit the sale of
the Restricted Stock without registration, the Company agrees to:
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(a) make and keep public information available, as those terms are used
and defined in Commission Rule 144;
(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required by the Company under the
Exchange Act.
7. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 3 and 4 above, the Company will
indemnify and hold harmless NVC, and each other person, if any, who controls
NVC within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which NVC or such controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses, or actions in respect
thereof, arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Sections 3 and 4 above, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse NVC, and each such controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, action or
expense; provided, however, that the Company will not be liable in any such
case if and to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information, pertaining to NVC, as such, furnished in writing by NVC
specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Section 3 above, NVC will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement and each director of the Company, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Section 3 above, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, and controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action, provided,
however, that NVC will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
NVC, as
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such, furnished in writing to the Company by NVC specifically for use in such
registration statement or prospectus; and provided further, however, that the
liability of NVC hereunder shall be limited to the proportion of any such loss,
claim, damage, liability or expense which is equal to the proportion that the
public offering price of the shares sold by NVC under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not in any event to exceed the proceeds received by NVC from
the sale of Restricted Stock covered by such registration statement.
(c) Promptly after receipt by a party indemnified hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 7 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 7 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 7 for any legal expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified parties
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) NVC,
exercising its rights under this Agreement, or any controlling person of NVC,
makes a claim for indemnification pursuant to this Section 7 but it is
judicially determined, by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal, that such indemnification may not be enforced in such
case, the fact that this Section 7 provides for indemnification in such case
notwithstanding, or (ii) contribution under the Securities Act may be required
on the part of NVC or any such controlling person in circumstances for which
indemnification is provided under this Section 7, then and in each such case,
the Company and NVC will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject, after contribution from others, in
such proportion so that NVC is responsible for the portion represented by the
percentage that the public offering price of its Restricted Stock offered by
the registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for the
remaining portion; provided, however, that in any such case, (x) NVC will not
be required to contribute any amount in excess of the public offering
price of all such Restricted Stock offered by it pursuant to such registration
statement; and (y) no person or entity guilty of fraudulent
Page 28 of 50 Pages
<PAGE> 29
misrepresentation, within the meaning of Section 11(f) of the Securities Act,
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.
8. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization where the Company is the surviving entity, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby to NVC shall continue with respect to the Common
Stock as so changed.
9. Miscellaneous.
(a) The rights granted to NVC hereunder may not be assigned to any other
person; provided, however, that NVC may assign any or all of its rights and
interests hereunder to one or more of its wholly-owned subsidiaries and
designate one or more of its wholly-owned subsidiaries to perform its
obligations hereunder (in any or all of which cases, NVC shall nonetheless
remain responsible for the performance of all of its obligations hereunder).
(b) Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered upon the
earlier of (i) personal delivery to the address set forth below, or (ii) in the
case of notice by Federal Express or other reputable overnight courier service,
two (2) business days after delivery to such courier service, addressed to the
party to be notified as follows:
if to the Company or NVC, at the address of such party set forth in
the Stock Purchase Agreement.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflict-of-laws principles
which would require the application of the laws of another jurisdiction.
(d) This Agreement may not be amended or modified, and no provision hereof
may be waived, without the written consent of the Company and NVC.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The provisions of Section 4(a) above to the contrary notwithstanding,
the Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 30 days in any 12-month period if there exists at the time
material non-public information relating to the Company which, in the
reasonable opinion of the Company, should not be disclosed.
(g) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this
Page 29 of 50 Pages
<PAGE> 30
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(h) As used in this Agreement, the masculine, feminine or neutral gender
and the singular or plural number shall be deemed to include the others
whenever the context so indicates or requires.
Page 30 of 50 Pages
<PAGE> 31
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by a duly authorized officer, and NVC has duly executed this Agreement, as of
the date first written above.
MILESTONE SCIENTIFIC, INC.
BY: /s/ Leonard Osser
-----------------------------
Leonard Osser, President
NEW VALLEY CORPORATION
BY: /S/ Richard J. Lampen
-----------------------------------------------
Richard J. Lampen, Executive Vice President
Page 31 of 50 Pages
<PAGE> 32
EXHIBIT D
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 240,000
shares of Common Stock
No. N - 001
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, NEW VALLEY CORPORATION
("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 9, 1997, and ending on September 9, 1999, 240,000
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.
Page 32 of 50 Pages
<PAGE> 33
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 dividend in
Page 33 of 50 Pages
<PAGE> 34
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 1/100th of a share, as the case may be.
Page 34 of 50 Pages
<PAGE> 35
(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
Page 35 of 50 Pages
<PAGE> 36
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,
Page 36 of 50 Pages
<PAGE> 37
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.
Page 37 of 50 Pages
<PAGE> 38
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, by
Page 38 of 50 Pages
<PAGE> 39
facsimile delivery or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
to Registered Holder: New Valley Corporation
100 S.E. 2nd Street
Miami, Florida 33131
Attention: Richard J. Lampen
Fax: (305)579-8009
to the Company: Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Attention: Leonard Osser, President
Fax: (201) 535-2829
with a copy to: Morse, Zelnick, Rose & Lander LLP
450 Park Avenue
New York, New York 10022
Attention: Stephen Zelnick, Esq.
Fax: (212) 838-9190
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: /s/ Leonard Osser
---------------------------------
Leonard Osser, President
Page 39 of 50 Pages
<PAGE> 40
EXHIBIT I
NOTICE OF EXERCISE
TO: Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
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:
Page 40 of 50 Pages
<PAGE> 41
EXHIBIT E
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 up to 260,000
shares of Common Stock
No. N - 022
CONTINGENT
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, NEW VALLEY CORPORATION
("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 Commencement Date (as defined below) and ending on September 9,
1999, up to 260,000 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.
The "Commencement Date" shall mean, with respect to any
Warrant Share, the 61st day after the day, if any, on which such Warrant Share,
together with the sum (without duplication) of (i) all other Warrant Shares as
to which the Commencement Date shall have previously occurred and which
Registered Holder shall not have exercised, (ii) the number of any shares of
Common Stock beneficially owned by Registered Holder (including, for purposes of
this paragraph, any affiliate of Registered Holder whose beneficial ownership
would be aggregated with Registered Holder for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder), and (iii) the number of any shares of
Common Stock that may then be received by Registered Holder upon exercise of a
warrant to purchase 240,000 shares of Common Stock issued to Registered Holder
on September 9, 1997, shall equal 9.9% or less of the total number of shares of
Common Stock of the Company then outstanding as determined in accordance with
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
Page 41 of 50 Pages
<PAGE> 42
1. Exercise.
(a) This Warrant may be exercised by Registered Holder with respect to
any Warrant Share as to which the Commencement Date shall have occurred, 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 dividend in
Page 42 of 50 Pages
<PAGE> 43
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 1/100th of a share, as the case may be.
Page 43 of 50 Pages
<PAGE> 44
(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
Page 44 of 50 Pages
<PAGE> 45
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,
Page 45 of 50 Pages
<PAGE> 46
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.
Page 46 of 50 Pages
<PAGE> 47
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, by
Page 47 of 50 Pages
<PAGE> 48
facsimile delivery or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
to Registered Holder: New Valley Corporation
100 S.E. 2nd Street
Miami, Florida 33131
Attention: Richard J. Lampen
Fax: (305)579-8009
to the Company: Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Attention: Leonard Osser, President
Fax: (201) 535-2829
with a copy to: Morse, Zelnick, Rose & Lander LLP
450 Park Avenue
New York, New York 10022
Attention: Stephen Zelnick, Esq.
Fax: (212) 838-9190
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: /s/ Leonard Osser
---------------------------------
Leonard Osser, President
Page 48 of 50 Pages
<PAGE> 49
EXHIBIT I
NOTICE OF EXERCISE
TO: Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
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:
Page 49 of 50 Pages
<PAGE> 50
EXHIBIT F
JOINT FILING AGREEMENT
New Valley Corporation, New Valley Holdings, Inc., BGLS Inc., Brooke Group
Ltd. and Bennett S. LeBow, each hereby agrees, in accordance with Rule 13d-1(f)
under the Securities Exchange Act of 1934, as amended, that the Schedule 13D
filed herewith, and any amendments thereto, relating to the shares of Common
Stock, $.001 par value per share, of Milestone Scientific Inc. are, and will be,
filed jointly on behalf of such person. In addition, each party to this
Agreement expressly authorizes each other party to this Agreement to file on its
behalf any and all amendments to such Schedule.
Date: September 15, 1997
NEW VALLEY CORPORATION
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
NEW VALLEY HOLDINGS, INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BGLS INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BROOKE GROUP LTD.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
/s/ Bennett S. LeBow
-----------------------------------
Bennett S. LeBow
Page 50 of 50 Pages
