Exhibit 4.19
LINE OF CREDIT AGREEMENT
This LINE OF CREDIT AGREEMENT (the "Agreement") is made as of March
9, 2001 between MILESTONE SCIENTIFIC INC., a Delaware corporation, with its
principal offices at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the
"Company"), and X. Xxxxxx Xxxxxxxx ("Xxxxxxxx" or the "Lender"), having an
address c/o Cumberland Associates LLC, 1114 Avenue of the Americas, Xxx Xxxx,
Xxx Xxxx 00000 and Xxxxxx Xxxxxx ("Gintel" or the "Lender"), having and address
at 00 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxx, XX 00000 (collectively the "Lenders").
WHEREAS, the Company desires to borrow from Lenders and Lenders desire to
lend to the Company up to an aggregate of $1,000,000 pursuant to a line of
credit;
NOW, THEREFORE, in consideration of the premises and the covenants herein
contained, each of the undersigned parties hereto agree as follows:
1. Line of Credit, Notes and Warrants. Each Lender hereby agrees to
lend to the Company a principal amount of $500,000 ($1,000,000 in the
aggregate), subject to the terms and conditions hereinafter set forth:
1.1 Xxxxxxxx shall deliver to the Company, on or before the date of
his execution and delivery of this Agreement, a good bank or certified check
payable to "X. Xxxxxx Xxxxxxxx" in the sum of $500,000.00 (the "Xxxxxxxx
Check"), which shall be deposited into a bank account in accordance with
Paragraph 1.3. Gintel shall deliver to the Company, contemporaneously with his
execution and delivery of this Agreement, a good bank or certified check payable
to "Xxxxxx Xxxxxx" in the sum of $500,000.00 (the "Gintel Check"), which also
shall be deposited into a bank account in accordance with Paragraph 1.3.
1.2 Subject to collection of the principal amount from each Lender,
the Company shall deliver the following to each Lender within five (5) business
days of the date hereof:
(a) A promissory note (the "Note") in the form annexed hereto as
Exhibit A, which Note shall (i) be dated the date hereof, (ii) be for a
principal amount of $500,000.00, and (iii) require interest be payable, at the
Company's option, either in cash upon maturity of the Note (less interest
received on amounts held in the Account), or quarterly in the common stock of
the Company (the "Common Stock"); and
(b) A warrant (the "Warrant") in the form annexed hereto as Exhibit
B (i) for the purchase of 100,000 shares of Common Stock, (ii) exercisable
commencing on the date hereof up to and including the fifth anniversary of the
date hereof, and (iii) for a per share purchase price equal to the closing price
of a share of Common Stock on the date hereof.
1.3 The Company, with the Lenders' cooperation, shall open two
separate bank accounts (the "Accounts") at PNC Bank Corp. branch located at 000
Xxxxx Xx., Xxxxxxxx, XX 00000: one in the name of Xxxxxxxx (the "Xxxxxxxx
Account") and a second in the name of Gintel (the "Gintel Account"). The Company
shall have the right to designate a signatory
authorized to withdraw funds from the Accounts on its behalf (the "Signatory").
The Company shall have the right to replace the Signatory at any time and the
Lenders hereby agree to cooperate in promptly effecting such change to the
Accounts. As soon as practicable after payment is received, the Company shall
deposit the Xxxxxxxx Check into the Xxxxxxxx Account and the Gintel Check into
the Gintel Account.
1.4 Upon the deposit of the Xxxxxxxx Check in accordance with
Paragraph 1.3, the Company shall have the right to withdraw from the Xxxxxxxx
Account the sum of $312,300. Upon the deposit of the Gintel Check in accordance
with Paragraph 1.3, the Company shall immediately transfer the sum of $156,150
from the Gintel Account to the Xxxxxxxx Account. Thereafter, the Company shall
have the right to withdraw from each of the Accounts the sum of $450.00 for each
unit of The Wand(R) (the "Unit") that it delivers to a health care practitioner,
including technicians (the "Practitioner") under the Company's 90 day trial
program (the "Program").
(a) For each Unit sold to a Practitioner as a result of the Program,
the Company shall return to each of the Accounts the sum of $450.00, less any
amounts previously returned to the Account with respect to that Unit under
Paragraph 1.4(b).
(b) For each disposable handpiece sold to a Practitioner for use
with the Unit under the Program, or for use with the Unit after the expiration
of the 90 day trial period, the Company shall return to each of the Accounts the
sum of $0.20, until the $450.00 withdrawn from the Account in connection with
that Unit is returned to the Account.
(c) For each Unit returned to the Company as unsold, the Company
shall use its best efforts to sell the Unit and shall not withdraw any
additional funds from the Accounts in respect to that Unit if such Unit
thereafter is delivered to another Practitioner under the Program.
2. Terms of the Notes and Warrants. Except as otherwise set forth in
this Agreement, the terms of the Notes and the Warrants shall be as set forth in
the Notes and the Warrants, respectively.
3. Additional Warrants. Pursuant to the terms of the Notes, the
Company may elect to extend the Maturity Date (as defined in Paragraph 3 of the
Notes) of the Lender's Note for one year. If such election is made, then the
holder of each Note whose Maturity Date has been extended shall receive a
Warrant (i) for the purchase of 50,000 shares of Common Stock, (ii) exercisable
commencing on the date of its issuance up to and including the fifth anniversary
of the date of its issuance, and (iii) for a per share purchase price equal to
the closing price of a share of Common Stock on the date of its issuance.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to Lenders, which representations and warranties shall
be true and correct as of the date hereof, as follows:
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4.1 Organization; Standing and Power. The Company and its
subsidiaries (a) are corporations duly organized, existing and in good standing
under the laws of the state of their incorporation, (b) have all requisite
corporate power and authority to own its properties and to carry on their
businesses as now conducted and as proposed hereafter to be conducted, (c) are
duly qualified to do business as foreign corporations in each and every
jurisdiction where such qualification is necessary except where the failure to
so qualify would not have a material adverse effect on the financial condition,
business, operations, assets or prospects of the Company and its subsidiaries as
a whole and (d) the Company has all requisite corporate power and authority to
execute and deliver, and perform all of its obligations under this Agreement.
4.2 Capitalization. The total authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock and no shares of preferred
stock. As of January 30, 2001, the Company had outstanding 10,772,847 shares of
Common Stock. In addition, as of January 30, 2001, there were 1,000,000 shares
of Common Stock reserved for issuance under the Company's 1997 Stock Option Plan
of which 932,110 shares were issuable pursuant to the exercise of outstanding
stock options ranging in exercise price from $1.00 to $23.00 per share. The
Company also has outstanding other compensatory options for 431,500 shares at a
weighted average price of $4.10 per share and warrants for 571,191 shares at
exercise prices ranging from $1.25 to $3.25 per share of Common Stock.
4.3 Authorization. The execution, delivery and performance by the
Company of its obligations under this Agreement has been duly authorized by all
requisite corporate action and will not, either prior to or as a result of the
consummation of the transactions contemplated by this Agreement: (a) violate any
law, any order of any court or other agency of government, any provision of the
Certificate of Incorporation or Bylaws of the Company or any contract,
indenture, agreement or other instrument to which the Company is a party, or by
which the Company or any of its assets or properties are bound, or (b) be in
conflict with, result in a breach of, or constitute (after the giving of notice
or lapse of time or both) a default under, or result in the creation or
imposition of any lien of any nature whatsoever upon any of the property or
assets of any Company pursuant to, or result in the acceleration of, any such
contract, indenture, agreement or other instrument. The Company is not required
to obtain any government approval, consent or authorization from, or to file any
declaration or statement with, any governmental instrumentality or agency in
connection with or as a condition to the execution, delivery or performance of
any of this Agreement other than the filings which have heretofore been made.
This Agreement is valid, binding and enforceable against the Company in
accordance with its terms.
4.4 Non-contravention. To the best of its knowledge, the Company is
not in violation or breach of or in default with respect to, complying with any
material provision of any contract, agreement, instrument, lease, license,
arrangement or understanding to which it is a party, and each such contract,
agreement, instrument, lease, license, arrangement and understanding is in full
force and effect and is the legal, valid and binding obligation of the Company
enforceable as to the Company in accordance with its terms (subject to
applicable bankruptcy, insolvency and other laws affecting the enforceability of
creditors' rights generally and to general equitable principals). Neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) violate any constitution,
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statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
the Company is subject or (b) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Company is a party or by which the Company is bound or to which any of the
Company's assets are subject.
4.5 Litigation. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Company, threatened in writing against the
Company, or any of its assets, which, if adversely determined, might reasonably
be expected to have a material adverse effect on the Company's business,
operations and financial condition.
4.6 SEC Filings. The information set forth in the Form 10-KSB/A for
the year ended December 31, 1999 and Form 10-QSB/A for the nine month period
ended September 30, 2000 (collectively, the "SEC Filings") as filed by the
Company with the Securities and Exchange Commission (the "SEC") is true, correct
and complete in all material respects as of the respective date of each such
filing and does not omit to state any material fact necessary in order to make
the statements therein not misleading. The financial statements of the Company
as set forth in the SEC Filings have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and fairly
present in all material respects the financial condition and results of
operations of the Company as of their respective dates. Since September 30,
2000, there has not been any material adverse change in the business, financial
condition or results of operations of the Company except that the Company has
continued to operate at a loss. Other than the liabilities set forth in the
financial statements included in the SEC Filings and liabilities which have
arisen after September 30, 2000 in the ordinary course of business, the Company
has no material liability, except as follows:
(a) In December 2000, we borrowed $400,000 from X. Xxxxxx Xxxxxxxx
under a purchase and line of credit agreement dated as of July 31, 2000. The
loan bears interest at 8% per annum and is due on December 31, 2003. In
addition, Xx. Xxxxxxxx received warrants to purchase 80,000 shares of our common
stock, exercisable at $1.25 per share, which was the fair market value of a
share on the date of grant.
(b) On January 26, 2001, we borrowed the remaining $100,000
available to us under the above-mentioned purchase and line of credit agreement
with Xx. Xxxxxxxx. On that date, Xx. Xxxxxxxx also received warrants to purchase
20,000 shares of our common stock, exercisable at $1.6875 per share, which was
the fair market value of a share on the date of grant.
(c) On January 19, 2001, the Company entered into a Private Equity
Line of Credit Agreement with Hillgreen Investments Limited, a British Virgin
Islands Corporation ("Hillgreen"), pursuant to which Hillgreen has agreed to
purchase up to 2,100,000 shares of Common Stock over a 36 month period. During
such period, the Company may request a drawdown under the equity line of credit
by putting shares of our common stock to Hillgreen, and Hillgreen will be
obligated to purchase the shares the Company puts to it, subject to exceptions
set forth in the agreement. During the 20 business days following a drawdown
notice, the number of shares to be sold and the price per share, which will be
87.5% of the volume
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weighted average price of the Common Stock for such period, will be calculated.
Upon the exercise of each drawdown, the Company will receive the amount of the
drawdown less a fee payable to legal counsel for Hillgreen and less a brokerage
fee payable to Jesup & Xxxxxx Securities Corporation ("Xxxxxx & Xxxxxx"), the
placement agent that introduced the Company to Hillgreen. In addition, the
Company granted to Hillgreen a warrant to purchase 100,000 shares of Common
Stock and granted to Jesup & Xxxxxx a warrant to purchase 75,000 shares of
Common Stock. On January 31, 2001, the Company filed with the SEC a registration
statement on Form S-2, the effectiveness of which is pending, to permit
Hillgreen to resell shares of Common Stock which it may purchase under the
equity line of credit agreement, and to permit Hillgreen and Jesup & Xxxxxx to
resell shares of Common Stock that they receive if they should exercise their
warrants.
4.7 Due Authorization. The issuance of the Notes and Warrants has
been duly authorized by all necessary corporate action and when issued will be
the legal and binding obligations of the Company enforceable in accordance with
their terms. The shares of Common Stock issuable upon exercise of the Warrants
or in respect of interest payable on the Notes have been duly authorized and
reserved for issuance and, when issued in accordance with the terms of the
Warrants or issued in respect of interest payable on the Notes, as applicable,
will be fully paid and non-assessable, free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act of 1933, as
amended (the "Securities Act") and state securities laws), taxes, security
interests, options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands.
4.8 Securities Law Exemption. Assuming the accuracy of Lenders'
representations and warranties set forth herein, the issuance of the Notes and
Warrants pursuant to this Agreement has been made in accordance with the
provisions and requirements of Regulation D ("Regulation D") or ss.4(6) under
the Securities Act and any applicable state law.
4.9 Use of Proceeds. The proceeds from the line of credit will be
used for general corporate purposes and shall be withdrawn from the Account only
in accordance with the procedure set forth in Paragraph 1.4 above.
4.10 Compliance with Laws. The Company is in compliance in all
material respects with all occupational safety, health, wage and hour,
employment discrimination, environmental, flammability, labeling, usury and
other applicable laws which are material to its businesses, and the Company is
not aware of any state of facts, events, conditions or occurrences which may now
or hereafter constitute or result in a violation of any of such applicable laws,
or which may give rise to the assertion of any such violation, the effect of
which could have a materially adverse effect on the Company's business,
operations and financial condition.
4.11 Licenses and Permits. The Company has obtained all federal,
state and local licenses and permits required to be maintained in connection
with and material to its operations, and all such licenses and permits obtained
are valid and in full force and effect.
4.12 Existing Registration Rights. Except for the Registration
Rights Agreement referred to in Paragraph 7 hereof, and the registration rights
given to Hillgreen Investments Limited ("Hillgreen") in connection with the
Private Equity Line of Credit
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Agreement by and between the Company and Hillgreen, dated January 19, 2001, the
Company is not a party to any agreement under which it is obligated to register
any of its securities under the Securities Act.
4.13 Patents, Trademarks, Copyrights, Etc. The Company owns or
validly licenses all patents, patent rights, patent applications, licenses, shop
rights, trademarks, trademark applications, tradenames, copyrights and other
proprietary information (collectively "Rights") used in the conduct of its
business as currently being conducted. To the actual knowledge of the Company,
the conduct of its business as currently being conducted does not conflict with
valid rights of others in any way, nor has any material use been made of the
Rights, except by the Company or by other entities duly licensed to use the
same.
4.14 No Other Representations. The Company shall not be deemed to
have made any representations, warranties, covenants, agreements or
indemnifications pertaining to the subject matter of this Agreement, whether
express or implied, except to the extent that such representations, warranties,
covenants, agreements or indemnifications are made in this Agreement or the
Schedules hereto or in any certificate or other agreement, document or
instrument delivered pursuant to the provisions of this Agreement.
5. Representations and Warranties of the Lenders. Each Lender hereby
represents and warrants to the Company, which representations and warranties
shall be true and correct as of the date hereof, as follows:
5.1 Authorization of Agreement. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary action
on his part, does not violate any laws or regulations applicable to him and is
the valid binding and enforceable obligation of his in accordance with its
terms.
5.2 Non-contravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which he is subject or (b) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which he is a party or by which he is bound or to which
any of his assets are subject.
5.3 Accredited Investor. He is an "accredited investor" as that term
is defined in Rule 501(a) of the Securities Act, and the rules promulgated
thereunder.
5.4 Investment. He acknowledges that this offering of Notes and
Warrants has not been reviewed by the United States Securities and Exchange
Commission ("SEC") and that the sale of the Notes and Warrants pursuant hereto
is intended to be a nonpublic offering pursuant to Paragraphs 4(2), 4(6) or 3(b)
of the Securities Act. Lender represents that the Notes or Warrants are being
purchased by him for his own account, for investment and not for distribution or
resale to others. Lender agrees that he will not sell or otherwise transfer the
Notes, Warrants or the shares of the Common Stock issuable upon exercise of the
Warrants
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unless such securities, as the case may be, are registered under the Securities
Act or unless an exemption from such registration is available. Lender
understands that neither the Notes, Warrants nor the shares of Common Stock
issuable upon exercise of the Warrants have been registered under the Securities
Act and they are or will be issued pursuant to a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.
5.5 Access to Data. Lender has been given copies of the SEC Filings
and has had an opportunity to review same. Lender has had an opportunity to
discuss the SEC Filings and the Company's business, management and financial
affairs with the Company's management and the opportunity to review the
Company's facilities, each to Lender's satisfaction. Lender understands that
such discussions, as well as any written information issued or provided by the
Company, were intended to describe the aspects of the Company's business and
prospects which the Company believes to be material but were not necessarily a
thorough or exhaustive description thereof.
5.6 Speculative Nature of Investment. Lender acknowledges that the
purchase of the Notes and Warrants involves a high degree of risk and that (i)
an investment in the Company is highly speculative and only investors who can
afford the loss of their entire investment should consider investing in the
Company and purchasing Notes and Warrants; (ii) Lender may not be able to
liquidate his investment; (iii) transferability of the Notes, Warrants and the
shares of Common Stock issuable upon exercise of the Warrants is extremely
limited; and (iv) Lender could sustain the loss of his entire investment.
5.7 Experience. Lender acknowledges that he has prior investment
experience, including investment in non-listed and non-registered securities, or
has employed the services of an investment advisor, attorney or accountant to
review all of the documents furnished or made available by the Company and to
evaluate the merits and risks of such an investment on Lender's behalf.
5.8 Lack of Liquidity. Lender understands that there is no public
market for the Notes or Warrants.
5.9 Legends. Lender consents to the placement of a legend on the
Notes, Warrants, and shares of Common Stock issued on exercise of the Warrants,
provided they are not then covered by an effective Registration Statement, all
as set forth in Paragraph 6 of this Agreement.
5.10 Commitment Fee. On the Maturity Date of the Notes (as defined
in Paragraph 3 of the Notes), the Company shall pay to each Lender a commitment
fee of 2% of the principal amount borrowed from the Lender.
5.11 Registered Representative. Lender acknowledges that if he is a
Registered Representative of a National Association of Securities Dealers, Inc.
("NASD") member firm, he must give such firm the notice required by the NASD
Conduct Rules, or any applicable successor rules of the NASD receipt of which
must be acknowledged by such firm on the signature page hereof.
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5.12 No Other Representations. Lender hereby represents that, except
as set forth herein, no representations or warranties have been made to the
Lender by the Company or any agent, employee or affiliate of the Company and in
entering into this transaction, Lender is not relying on any information, other
than that contained herein, that contained in the SEC Filings and the results of
independent investigation by the Lender. Lender shall not be deemed to have made
any representations, warranties, covenants, agreements or indemnifications
pertaining to the subject matter of this Agreement, whether express or implied,
except to the extent that such representations, warranties, covenants,
agreements or indemnifications are made in this Agreement or the Schedules
hereto or in any certificate or other agreement, document or instrument
delivered pursuant to the provisions of this Agreement.
5.13 No Broker. There is no firm, corporation, agency or other
entity or person that is entitled to a finder's fee or any type of commission in
relation to or in connection with the transactions contemplated by this
Agreement as a result of any agreement or understanding with Lender or any of
its directors, officers, employees or agents.
6. Legends. The Notes and Warrants shall be endorsed with the
following legend:
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL (I) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") SHALL HAVE BECOME
EFFECTIVE WITH RESPECT THERETO OR (II) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS
IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE
ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.
THIS SECURITY IS SUBJECT TO THE TERMS OF A LINE OF CREDIT AGREEMENT, DATED
AS OF MARCH 9, 2001, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
MILESTONE SCIENTIFIC INC.
7. Registration Rights. The Company and the Lenders will enter into
a registration rights agreement, substantially in the form annexed hereto as
Exhibit D.
8. Confidentiality. Lenders covenants and agrees that none of
Lenders, his agents and representatives will use for their own benefit, convey
or disclose to any third party any information provided by the Company
concerning its current or proposed business, operations and financial
conditions, other than information which is already publicly available, was
already known to Lenders or is obtained from a source other than the Company and
to the extent required by law.
9. Affirmative Covenants. The Company covenants and agrees with the
Lenders that, from the date hereof and until the Notes have been paid in full,
it shall:
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9.1 Corporate. Do or cause to be done all things necessary to at all
times (a) other than mergers solely among the Company and any of its
subsidiaries, preserve, renew and keep in full force and effect its corporate
existence, patents, trademarks, rights, licenses, permits and franchises, (b)
comply with this Agreement, (c) maintain and preserve all of its material
property used or useful in the conduct of their respective businesses, and (d)
comply with all applicable laws material to its businesses, including the
reporting requirements of the Securities Exchange Act of 1934, whether now in
effect or hereafter enacted, promulgated or issued.
9.2 Notice of Proceedings. Give prompt written notice to the Lenders
of any proceeding instituted against the Company in any federal or state court
or before any commission or other regulatory body, whether federal, state or
local, which, if adversely determined, could have a material adverse effect upon
their business, operations, properties, assets or condition, financial or
otherwise when taken as a whole.
9.3 Books and Records; Inspection. Maintain true and accurate books
and records respecting all of their business operations, and permit agents or
representatives of the Lenders to inspect, at any time during normal business
hours, upon reasonable notice, and without undue material disruption of their
business operations, all of such books and records and to visit the properties
and operations of the Company and consult with the employees and officers of the
Company.
9.4 Notice of Default or Material Adverse Change. Promptly advise
the Lenders of any event which could have a material adverse effect on the
Company's business, operation, property, assets or condition, financial or
otherwise, or the existence or occurrence of any Event of Default (as defined in
the Notes), any breach of this Paragraph 9 or any default of the Company under
any agreement or instrument to which it is a party.
9.5 Notice of Filings with SEC. Promptly advise the Lenders of any
filing of a registration statement under the Securities Act with the SEC
covering any of the Company's securities.
9.6 Delivery of Financial Statements and other Reports. The Company
will deliver to each holder of Notes promptly upon transmission thereof, copies
of all financial statements, information circulars, proxy statements and reports
as the Company shall send to its stockholders and copies of all registration
statements, prospectuses and all reports which it shall file with the Securities
and Exchange Commission or with any securities exchange on which any of its
securities is listed or with NASDAQ and copies of all press releases and other
statements made available to the public concerning material developments in the
business of the Company.
9.7 Stock to be Reserved. The Company covenants that all shares of
Common Stock that may be issued upon exercise of the Warrants or in respect of
interest payable on the Notes will, upon issuance, be validly issued, fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof. The Company covenants that during the period in which the
Warrants are outstanding it will at all times have authorized and reserved a
sufficient number of shares of Common Stock to permit the exercise of the
Warrants.
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10. Conditions Precedent to the Obligations of the Company. The
obligations of the Company pursuant to this Agreement are subject to the
satisfaction at the Closing of each of the following conditions; provided,
however, that the Company may, in its sole discretion, waive any of such
conditions and proceed with the transactions contemplated hereby.
10.1 Accuracy of Representations and Warranties. The representations
and warranties of the Lenders contained in this Agreement or in any document or
certificate delivered in connection with the transactions contemplated hereby
shall be true and correct in all material respects on and as of the date hereof.
10.2 Performance of Agreements. Each Lender shall have duly executed
and delivered this Agreement to the Company and shall have performed and
complied in all material respects with all covenants, obligations and agreements
to be performed or complied with by him on or before the date hereof.
11. Conditions Precedent to the Obligations of the Lenders. The
obligations of the Lenders under this Agreement is subject to the satisfaction
at the Closing of each of the following conditions; provided, however, that the
Lenders may, in Lenders's sole discretion, waive any of such conditions and
proceed with the transactions contemplated hereby.
11.1 Accuracy of Representations and Warranties. The representations
and warranties of the Company contained in this Agreement or in any document or
certificate delivered in connection with the transactions contemplated hereby
are true and correct in all material respects on and as of the date hereof.
11.2 Performance of Agreements. The Company shall have duly executed
and delivered this Agreement and the Registration Rights Agreement and shall
have performed and complied in all material respects with all covenants,
obligations and agreements to be performed or complied with by it on or before
the date hereof.
11.3 Litigation, Material Changes, Defaults, etc. No claim, action,
suit, proceeding, arbitration or hearing or notice of hearing shall be pending
(and no action or investigation by any governmental authority shall be
threatened) which seeks to enjoin, prevent or adversely affect the consummation
of the transactions contemplated by this Agreement. There shall not have been
any changes in the business of the Company, which have or could reasonably be
expected to have a material adverse effect on the business, operations,
properties, assets or condition, financial or otherwise, of the Company. There
shall exist no defaults under the provisions of any instrument evidencing
indebtedness of the Company.
11.4 Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes and Warrants shall not be prohibited by any applicable law
or governmental regulation (including without limitation Regulations G, T and X
of the Board of Governors of the Federal Reserve System) and shall not subject
the holders of the Notes and Warrants to any tax, penalty or liability under any
applicable law or governmental regulation.
12. General Provisions.
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12.1 Survival of Representations, Warranties, Covenants, and
Agreements. The representations, warranties, covenants and agreements contained
in this Agreement shall survive the execution of this Agreement.
12.2 Notices. All notices, requests, demands and other
communications which are required to be or may be given under this Agreement to
any party to any of the other parties shall be in writing and shall be deemed to
have been duly given when (a) delivered in person, (b) the day following
dispatch by an overnight courier service (such as Federal Express or UPS, etc.)
or (c) five (5) days after dispatch by certified or registered first class mail,
postage prepaid, return receipt requested, to the party to whom the same is so
given or made. Any notice or other communication given hereunder shall be
addressed to the Company, at its principal offices as set forth above and to the
Lenders at his address indicated on the signature page hereto.
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.4 Headings. All headings are inserted for convenience of
reference only and shall not affect the meaning or interpretation of any such
provisions or of this Agreement, taken as an entirety.
12.5 Severability. If and to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
12.6 Changes, Waivers, Etc. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but rather may
only be changed by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. It is
agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
12.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The parties
hereby agree that any dispute which may arise between them arising out of or in
connection with this Agreement shall be adjudicated before a court located in
New York City and they hereby submit to the exclusive jurisdiction of the courts
of the State of New York located in New York, New York and of the federal courts
in the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Agreement or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
below or such other address as the undersigned shall furnish in writing to the
other.
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12.8 Binding Effects. This Agreement shall be binding upon and inure
to the benefit of each of the undersigned parties and their respective
successors, legal representatives and assigns. The failure of one Lender to
execute this Agreement shall not affect the validity or enforceability of the
Agreement between the Company and the Lender who has executed the Agreement.
12.9 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter thereof
and incorporates and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
12.10 Further Assurances. The parties agree to execute and deliver
all such further documents, agreements and instruments and take such other and
further action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
12.11 Expenses. Each party hereto shall pay all of its own fees and
expenses in connection with the transactions contemplated hereby.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement as of the day and year first above written.
MILESTONE SCIENTIFIC INC.
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, Chairman and
Chief Executive Officer
/s/ X. Xxxxxx Xxxxxxxx
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X. XXXXXX XXXXXXXX
--------------------------------
XXXXXX XXXXXX
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EXHIBIT A
FORM OF NOTE
13
EXHIBIT B
FORM OF WARRANT
14
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
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