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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
MILESTONE SCIENTIFIC, INC.
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(Name of Issuer)
Common Stock, 0.001 Par Value
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(Title of Class of Securities)
91232910
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(CUSIP Number)
Eric R. Roper, Esq.
c/o Roper, Barandes & Fertel LLP
130 West 42nd Street
New York, NY 10036
(212) 869-2222
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 10, 1997
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(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. [ ]
Check the following box if a fee is being paid with the statement. [ ] (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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 and 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).
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SCHEDULE 13D
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CUSIP No.
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<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
LITTLE WING, L.P. 13-3778596
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e): [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING 533,046
PERSON WITH
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8 SHARED VOTING POWER
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9 SOLE DISPOSITIVE POWER
533,046
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10 SHARED DISPOSITIVE POWER:
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
533,046
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
7.13%
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14 TYPE OF REPORTING PERSON
PN
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Item 1. Securities and Issuer.
This filing relates to the purchase of shares of Common Stock, par value
$0.001 per share (the "Common Stock"), issued by Milestone Scientific, Inc., a
Delaware corporation (the "Company"), whose principal executive offices are at
220 South Orange Avenue, Livingston Corporate Park, Livingston, N.J. 07039.
Item 2. Identity and Background
(a) This filing is made by Little Wing, L.P., a Delaware limited
partnership ("Little Wing"), with respect to the shares of Common Stock and
warrants on common stock held by it. The General Partner of Little Wing is
Quilcap Corp., a Delaware Corporation, the President of which is Parker Quillen.
(b) The address of Little Wing is c/o Quilcap Corp., 375 Park Avenue -
Suite 1404, New York, New York 10152.
(c) The principal business of Little Wing is that of a private
investment firm engaging in the purchase and sale of securities. The present
principal occupation of its General Partner is as general partner of Little
Wing.
(d) None of the persons referred to in paragraph (a) above has, during
the last five (5) years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the persons referred to in paragraph (a) above has, during
the last five (5) years, been a party to a civil proceeding of a judicial or
administrative body of competent
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jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations or, prohibiting or mandating
activities subject to, Federal or State securities laws or finding any violation
with respect to such laws.
(f) Mr. Quillen is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
1. Little Wing purchased 299,713 shares of Common Stock and received
warrants to purchase an additional 233,333 shares of Common Stock, pursuant to
the terms of the Company's private placement of shares. The purchase price was
One Million Three Hundred Ninety Nine Thousand and Nine Hundred Ninety Eight
Dollars ($1,399,998). Such funds were furnished from the investment capital of
Little Wing.
Item 4. Purpose of Transaction.
The purpose of the acquisition of shares of Common Stock by Little Wing
is for investment. Little Wing may make further purchases of Common Stock from
time to time and may dispose of any or all of the shares of Common Stock held by
it at any time. Little Wing has no plans or proposals which relate to, or could
result in, any of the matters referred to in paragraphs (b) through (j),
inclusive, of Item 4 of Schedule
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13D. Little Wing may, at any time and from time to time, review or reconsider
its position with respect to the Company, and formulate plans or proposals with
respect to the Company, and formulate plans or proposals with respect to any of
such matters, but has no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, (i) Little Wing owns beneficially 299,713
shares of Common Stock, constituting approximately 4.01% of the shares
outstanding and has warrants for 233,333 shares of Common Stock, constituting
approximately 3.12% of the shares outstanding. Such shares total 533,046 and
constitute approximately 7.13% of the shares outstanding. The percentages used
herein are calculated based upon the aggregate of (i) the 5,568,152 shares of
Common Stock stated to be issued and outstanding as of July 31, 1997 as
reflected in the Company's proxy statement dated August 20, 1997, and (ii) the
1,666,666 shares issued between September 9, 1997 and September 11, 1997.
(b) Little Wing has the power to vote and to dispose of the shares of
Common Stock owned by it, which power may be exercised by Mr. Quillen, as
principal of the General Partner of Little Wing.
(c) The trading dates, number of shares sold and price per share for the
transactions by Little Wing are set forth in Schedule A.
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Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
1. Stock Purchase Agreement dated September 9, 1997 between Little Wing
and Company for Little Wing's purchase of 233,333 shares and warrants to
purchase an additional 233,333 shares at an exercise price of $9.00 per share.
2. Registration Rights Agreement between LIttle Wing and Company dated
September 9, 1997 under which Company agrees to file a registration statement
with the Securities and Exchange Commission by September 30, 1997.
3. A warrant entitling Little Wing to purchase 233,333 shares of Company
at $9.00 per share between September 7, 1997 and September 9, 1999.
Item 7. Material to be Filed as Exhibits.
There is filed herewith:
1. As Exhibit 1, a copy of the Stock Purchase Agreement dated
September 9, 1997.
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2. As Exhibit 2, a copy of the Registration Rights Agreement
dated September 9, 1997.
3. As Exhibit 3, a copy of the Warrant.
Dated: September 18, 1997
LITTLE WING, L.P.
By: Quilcap Corp.
General Partner
By: /s/ PARKER QUILLEN
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Parker Quillen - President
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Schedule A
Little Wing, L.P.
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<TABLE>
<CAPTION>
Trade Date No. of Shares Price Per Share
Purchased
(sold)
<S> <C> <C>
9/10/97 233,333 $6.00
9/10/97 233,333 Warrants at
$9.00 per share
8/14/97 35,900 $7.21
8/15/97 18,700 $7.30
8/18/97 1,800 $7.06
8/21/97 6,300 $7.44
8/21/97 180 $7.44
8/22/97 7,700 $7.34
8/25/97 2,500 $7.00
8/27/97 1,050 $6.81
8/28/97 5,250 $6.81
9/9/97 ( 13,000) (11.60)
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STATEMENT OF DIFFERENCES
The section symbol shall be expressed as........................ 'SS'
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STOCK PURCHASE AGREEMENT
Agreement entered into on September 9th, 1997, by and among Little Wing
L.P., a Delaware limited partnership (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) 233,333
shares (the "Shares") of Seller's common stock, par value $.001 per share (the
"Common Stock"), and (ii) warrants (the "Warrants") to purchase 233,333 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 $1,399,998 (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 'SS'.2(c) below.
"Closing Date" has the meaning set forth in 'SS'.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.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
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"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 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").
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(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 'SS'.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 'SS'.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 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.
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(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 1955,478 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 up to $10 million
of shares of Common Stock and warrants on the same terms and conditions
as the transactions contemplated hereby. The transactions contemplated
hereby are being made pursuant to such authorization.
(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 represents
and warrants to the Seller that the statements contained in this 'SS'.3(b) are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date
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(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this 'SS'.3(b)).
(i) Organization of the Buyer. The Buyer is a partnership duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation.
(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 governing documents 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 contemplated hereby.
4. Post-Closing Covenants. The Parties agree as follows with
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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 'SS'.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
'SS'.3(a)(v), 'SS'.3(a)(viii) and 'SS'.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 'SS'.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 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
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pursuant to 'SS'.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 'SS'.5. All
indemnification payments under this 'SS'.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 'SS'.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 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).
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(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
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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:
Little Wings L.P.
c/o QuillCap Corp.
375 Park Avenue, Suite 1404
New York, New York 10152
Att'n: Mr. Parker Quillen
Fax: 212-521-5023
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 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,
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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.
LITTLE WING, L.P.
By:
-------------------------------
Title:
----------------------------
MILESTONE SCIENTIFIC, INC.
By:
-------------------------------
Title: Leonard Osser, President
----------------------------
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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 Little Wing, L.P. ("Purchaser"), a Delaware limited
partnership.
WITNESSETH
WHEREAS, the Company and Purchaser 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 Purchaser.
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 233,333 shares of Common Stock of the
Company and the 233,333 shares of Common Stock of the Company underlying the
Warrants which are being sold to Purchaser 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.
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"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 Purchaser.
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 Purchaser's intended method of
disposition set forth in such registration statement for such period;
(c) furnish to Purchaser such number of copies of the registration
statement and the prospectus included therein, including each preliminary
prospectus, as Purchaser reasonably may request in order to facilitate the
public sale or other disposition of the Restricted Stock covered by such
registration statement;
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(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 Purchaser 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 Purchaser 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 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 Purchaser 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 Purchaser or its counsel may
reasonably deem necessary to satisfy Purchaser and its counsel as to the
accuracy and completeness of the registration statement;
(h) deliver promptly to Purchaser 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, Purchaser 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
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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 Purchaser.
6. Rule 144 Reporting. With a view to making available to Purchaser 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:
(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 Purchaser, and each other person, if any, who
controls Purchaser within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which Purchaser 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 Purchaser, 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
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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
Purchaser, as such, furnished in writing by Purchaser 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, Purchaser 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 Purchaser 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 Purchaser, as such, furnished in
writing to the Company by Purchaser specifically for use in such registration
statement or prospectus; and provided further, however, that the liability of
Purchaser 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 Purchaser 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 Purchaser 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
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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) Purchaser,
exercising its rights under this Agreement, or any controlling person of
Purchaser, 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 Purchaser 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 Purchaser 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 Purchaser 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) Purchaser 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
misrepresentation, within the meaning of Section 11(f)
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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 Purchaser shall continue with respect to the Common
Stock as so changed.
9. Miscellaneous.
(a) The rights granted to Purchaser hereunder may not be assigned to any
other person; provided, however, that Purchaser 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, Purchaser 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 Purchaser, 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 Purchaser.
(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
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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 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.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by a duly authorized officer, and Purchaser has duly executed this Agreement, as
of the date first written above.
MILESTONE SCIENTIFIC, INC.
By:
-----------------------------
Leonard Osser, President
LITTLE WING, L.P.
By:
----------------------------
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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 233,333 shares of Common Stock
No. N - 023
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, Little Wings L.P.
("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, 233,333 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.
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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 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
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case, appropriate adjustment (as reasonably determined by the Board of Directors
of the Company) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of Registered Holder
such that the provisions set forth in this Section 2 (including provisions with
respect to the Purchase Price) shall thereafter be applicable, as nearly as is
reasonably practicable, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of this Warrant.
(c) Price Adjustment. No adjustment in the per share exercise price
shall be required unless such adjustment would require an increase or decrease
in the Purchase Price of at least $0.01, provided, however, that any adjustments
which by reason of this paragraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 2 shall be made to the nearest cent or to the nearest 1/lOOth
of a share, as the case may be.
(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 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
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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, 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
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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.
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 facsimile delivery or, if mailed, postage prepaid, by
certified mail, return receipt requested, as follows:
to Registered Holder: Little Wing, L.P.
c/o QuillCap Corp.
375 Park Avenue, Suite 1404
New York, New York 10152
Attention: Mr. Parker Quillen
to the Company: Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
Attention: Leonard Osser, President
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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:
-------------------------
Leonard Osser, President
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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:
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