Exhibit 4.38
SECOND AMENDMENT OF PURCHASE AGREEMENT
DATED JANUARY 31, 2000
AMENDMENT, dated April 15, 2002, (the "Amendment") among Milestone
Scientific Inc., a Delaware corporation with its principal offices at 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Company"), and the holders of
the Company's 20% Senior Secured Promissory Notes (the "Notes") (individually,
the "Noteholder" and collectively, the "Noteholders") to Purchase Agreement
dated January 31, 2000.
RECITALS
WHEREAS, pursuant to an Amendment To Purchase Agreement, dated March 16,
2001 among the Company and the Noteholders (the "the Original Amendment" and
"Agreement", respectively), each Noteholder was issued by the Company a 20%
Senior Secured Promissory Note on which, as of March 31, 2002, there is a
balance in the amounts set forth opposite each Noteholder's name on Schedule A;
WHEREAS, pursuant to paragraph 12.11 of the Agreement, the payment of
interest, time of payment of interest, the interest rate payable, payment of
principal and time of payment of principal on the Notes may be changed by the
written consent of holders then holding at least 80% of the outstanding
principal amount of the Notes; and
WHEREAS, the Company and the undersigned Noteholders desire to amend the
Original Amendment and exchange their Notes for the Company's 6%/12% Senior
Secured Promissory Notes (the "New Notes") as described herein;
NOW, THEREFORE, in consideration of the promises set forth below and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the undersigned hereby agree as follows:
1. The Company shall issue to each Noteholder a New Note having the
following terms:
a. The issuance date shall be as of March 31, 2002 (the "Issuance
Date");
b. The maturity date shall be July 1, 2003 (the "Maturity Date");
c. The face value shall be equal to the outstanding principal and
interest on the Noteholder's Note as of March 31, 2002 (the "Face
Value");
d. Interest shall accrue on the Face Value at the rate of 6% per annum
from the Issuance Date to the Maturity Date, if paid in cash, or 12%
per annum
from the Issuance Date to the Maturity Date, if paid in Common
Stock, as defined below. Interest shall be payable on the Maturity
Date;
e. At the option of the Company, the Face Value shall be payable either
in cash or in shares of the Company's Common Stock, Par value $.001
per share (the "Common Stock"), valued at the average closing price
per share of the Common Stock for the five trading days ending the
day prior to the Maturity Date of the New Notes, provided that such
shares of Common Stock have been registered pursuant to the
Registration Rights Agreement among the Company and Noteholders,
dated January 31, 2000 (the "Registration Rights Agreement");
f. The New Notes shall continue to be secured by raw material, work in
process, finished goods inventories and certain proceeds thereof,
copyrights, trademarks and other intellectual property that may now
or hereinafter be owned by the Company, and the Company shall
execute and deliver such documents and instruments and take other
reasonable actions to insure that the Noteholders have a perfected
first security interest in the above mentioned assets, all pursuant
to the Security Agreement dated January 31, 2000 among the Company
and the Noteholders (the "Security Agreement"), which is hereby
amended to substitute the New Note for the Note in all references;
g. The payment of the entire Face Value, including all accrued
interest, of the New Notes, shall be senior in right of payment to
all other indebtedness of the Company, whether incurred prior or
subsequent to the date of thereof other than (i) any purchase money
obligations incurred by the Company in connection with the purchase
of property in the ordinary course of business, and (ii) all payment
obligations of the Company pursuant to any capitalized lease entered
into by the Company, and (iii) all payables incurred by the Company
in the ordinary course of its business; and
h. It is confirmed that there are no restrictions on the Company's
right to obtain additional unsecured loans so long as they bear a
maturity date that is subsequent to August 1, 2003.
i. Except as otherwise provided herein, the provisions of the Note
relating to the rights of the Noteholders and the obligations of the
Company shall be incorporated into the New Notes, which shall appear
substantially in the form annexed hereto as Exhibit A.
2. Each Noteholder shall promptly return his Notes to the Company in
exchange for the New Notes in the amount set forth opposite his name on Schedule
A.
3. The Company's obligations and the rights of the Noteholders under the
Notes shall terminate upon the execution of this Amendment by the holders of 80%
of the
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outstanding principal amount of the Notes, except for the right of the
Noteholders to exchange his Note for the New Note, as provided herein.
4. As additional consideration for the extension of the maturity dates on
the Notes, the Company shall issue, to each of the undersigned Noteholders who
execute and return this Amendment to the Company by the close of business on
April 15, 2002, shares of the Company's Common Stock with a value of $120 for
each $1,000 Face Value of the New Note held by such Noteholder. The shares shall
be issued promptly following maturity and will be valued at the average closing
price during the five trading days preceding maturity.
5. The Registration Rights Agreement is hereby amended to include in the
definition of "Registrable Securities" as used therein any shares of Common
Stock that may be issued as payment on principal and interest on the New Notes.
6. Except as otherwise provided herein, the Agreement, the Security
Agreement, the Warrants, and the Registration Rights Agreement shall continue
unchanged and in full force and effect.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed as of the date first above written.
MILESTONE SCIENTIFIC INC.
By: ___________________________________________
Xxxxxxx Xxxxx, Chairman and
Chief Executive Officer
_______________________________________________
X. XXXXXX XXXXXXXX
CUMBERLAND PARTNERS
by Cumberland Associates LLC, as its investment
advisor
By: ___________________________________________
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LONGVIEW PARTNERS
by Cumberland Associates LLC, as its investment
advisor
By: ___________________________________________
LONGVIEW PARTNERS B, L.P.
by Cumberland Associates LLC, as its investment
advisor
By: ___________________________________________
LONGVIEW PARTNERS C, L.P.
by Cumberland Associates LLC, as its investment
advisor
By: ___________________________________________
MORSE, ZELNICK, ROSE & LANDER
By: ___________________________________________
Xxxxxxx X. Xxxxxxx
_______________________________________________
XXXXXXX XXXXX
STRATEGIC RESTRUCTURING
PARTNERSHIP LP
By: ___________________________________________
Xxxxxxx Xxxxxx
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_______________________________________________
XXXXXXXX XXXX
_______________________________________________
XXXXXX XXXXXXX
_______________________________________________
XXXXX XXXX XXXXX
_______________________________________________
XXX XXXXXX
_______________________________________________
XXXXX XXXXXXX XXXXX
TRICOR SYSTEMS INCORPORATED
By: ___________________________________________
Xxxx Xxxxx
_______________________________________________
XXXXXX XXXXXX
_______________________________________________
XXXXX XXXXXXXXXX
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SCHEDULE A
Noteholder Face value of New Note
X. XXXXXX XXXXXXXX $130,424.35
CUMBERLAND PARTNERS
by Cumberland Associates LLC,
as its investment advisor 130,461.25
LONGVIEW PARTNERS
by Cumberland Associates LLC,
as its investment advisor 14,495.69
LONGVIEW PARTNERS B, L.P.
by Cumberland Associates LLC,
as its investment advisor 18,759.13
LONGVIEW PARTNERS C, L.P.
by Cumberland Associates LLC,
as its investment advisor 6,821.50
MORSE, ZELNICK, ROSE
& LANDER LLP 111,529.13
XXXXXXX XXXXX 341,988.65
STRATEGIC RESTRUCTURING
PARTNERSHIP LP 21,447.60
XXXXXXXX X. XXXX 41,938.90
XXXXXX XXXXXXX and
XXXXX XXXX XXXXX 45,242.49
XXX XXXXXX $ 36,263.54
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XXXXX XXXXXXX XXXXX 9,065.89
TRICOR SYSTEMS
INCORPORATED 22,664.71
XXXXXX XXXXXX 45,242.49
XXXXX XXXXXXXXXX 45,242.49
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