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 SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
THERETO UNDER THE ACT AND COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW,
OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. THE COMPANY'S SUBSCRIPTION
AGREEMENT WITH THE HOLDER CONTAINS ADDITIONAL PROVISIONS RESTRICTING THE
TRANSFER OF THIS WARRANT AND THE WARRANT SHARES AND THIS WARRANT AND SUCH
SUBSCRIPTION AGREEMENT SET FORTH THE COMPANY'S OBLIGATIONS TO REGISTER THE
RESALE OF THE WARRANT SHARES. A COPY OF SUCH SUBSCRIPTION AGREEMENT IS AVAILABLE
FOR INSPECTION AT THE COMPANY'S OFFICE.
For the Purchase of
_______ shares of
No. W-___ Common Stock
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, ____________________________________________,
(Name)
____________________________________________________________________________ ,
(Address)
or his, her or its registered assigns ("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 March 13, 1997, and ending
on March 13, 2000, _____________ shares of Common Stock, $.001 par value, of the
Company ("Common Stock"), at a purchase price equal to $4.72 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.
Exercise.
(a) This Warrant may be exercised by the 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 such 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 1(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
1(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, the Registered
Holder, or, subject to the terms and conditions hereof, to such other individual
or entity as such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct:
(i) a certificate or certificates for the number of full shares of
Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such 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 the Registered Holder upon such exercise as provided
in subsection 1(a) above.
I. 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
2
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 shall, 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 shall, simultaneously with the
effectiveness of such combination or reverse split, 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 the
Registered Holder of this Warrant 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 such 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,
such Registered Holder had held the number of shares of Common Stock which were
then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder of
this Warrant 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.
3
(c) Price Adjustment. No adjustment in the per share exercise price shall
be required unless such adjustment would require an increase or decrease in the
Purchase Price of at least $0.01; provided, however, that any adjustments which
by reason of this paragraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 2 shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be.
(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 the Registered Holder of this
Warrant 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 the Registered Holder of this Warrant 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.
II. 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.
III. 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
4
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 ISSUANCE OF THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT OR APPLICABLE
STATE SECURITIES LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED."
IV. Certain Dividends. If the Company pays a dividend or makes a distribution
on the Common Stock ("Dividend"), other than a stock dividend payable in shares
of Common Stock, then the Company will pay or distribute to the Registered
Holder of this Warrant, 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.
V. Registration Rights of Warrant Holder; Extra Warrants.
(a) Registration; Extra Warrants. The Company shall 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 GKN
Securities Corp. ("Placement Agent") registering for reoffer and resale the
Warrant Shares. The Company agrees to file the Registration Statement on or
before April 30, 1997. The Company agrees to use its best efforts to have the
Registration Statement declared effective by the 75th day after the initial
filing of the Registration Statement ("Target Date"). If the Company shall
either fail to file the Registration Statement or to use its best efforts to
have the Registration Statement declared effective by the Target Date, and the
Registration Statement is not declared effective by the Target Date, then on the
5
Target Date and on each monthly anniversary of the Target Date thereafter until
the earlier of the effective date of the Registration Statement ("Effective
Date") or the twentieth monthly anniversary of the Target Date, the Company
shall issue to the Registered Holder (or successor or permitted transferee)
additional Warrants ("Extra Warrants") to purchase a number of shares of Common
Stock equal to 5% of the number of Warrant Shares underlying this Warrant. The
Extra Warrants shall have the same terms, rights and conditions as this Warrant.
The Company agrees that to the extent that the Company issues any Extra Warrants
or is obliged to issue any Extra Warrants, it shall include the Common Stock
underlying such Extra Warrants in the Registration Statement. The Company shall
keep the Registration Statement effective and current until all the securities
thereunder are sold or may be sold freely under an appropriate exemption under
the Act and the blue sky laws of the states selected by the Placement Agreement.
The Registration Statement will also register for re-offer and re-sale the
shares of Common Stock underlying certain unit purchase options issued to the
Placement Agent and its designees or their respective successors or transferees.
(b) The Company shall bear all the expenses and pay all the fees it incurs
in connection with the preparation, filing, modifying and amending of the
Registration Statement, providing reasonable numbers of the prospectus contained
therein to the Registered Holder and effecting the issuance and transfer of the
Warrant Shares on an expeditious basis. The Company shall also pay the fees (at
regular hourly rates, but no more than aggregate fees of $5,000) and expenses of
one special counsel to all the Registered Holders ("Special Counsel") in
connection with the registration of the Warrant Shares and the preparation,
filing, modifying and amending of the Registration Statement. The Placement
Agent has selected Xxxxxxxx Xxxxxx & Xxxxxx as Special Counsel and the
Registered Holder acknowledges and agrees to this selection.
(c) Indemnification. The Company shall indemnify the Registered Holder(s)
of the Warrant Shares to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Registered Holders within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all reasonable attorneys' fees and other
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever incurred by the indemnified party in any action or
proceeding between the indemnitor and indemnified party or between the
indemnified party and any third party or otherwise) to which any of them may
become subject under the Act, the Exchange Act or any other statute or at common
law or otherwise under the laws of foreign countries, arising from such
registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any preliminary prospectus, the
6
Registration Statement or prospectus (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration statement and prospectus in which is included the Warrant Shares;
or (iii) any application or other document or written communication
(collectively called "application") executed by the Company or based upon
written information furnished by the Company in any jurisdiction in order to
qualify the Warrant Shares under the securities laws thereof or filed with the
Commission, any state securities commission or agency, Nasdaq or any securities
exchange; or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, unless
such statement or omission is made in reliance upon, and in conformity with,
written information furnished to the Company with respect to the Registered
Holders expressly for use in any preliminary prospectus, the Registration
Statement or prospectus, or any amendment or supplement thereof, or in any
application, as the case may be. The Company agrees promptly to notify the
Registered Holders of the commencement of any litigation or proceedings against
the Company or any of its officers, directors or controlling persons in
connection with the issue and sale or resale of the Warrant Shares or in
connection with the Registration Statement or prospectus.
VI. 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 the
Registered Holder of this Warrant 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,
7
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.
VII. 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.
VIII. 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.
IX. Transfers, etc.
(a) The Company will maintain a register containing the names and addresses
of the Registered Holders of this Warrant. Any Registered Holder may change its,
his or her 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 the Registered Holder of this Warrant 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.
8
X. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
XI. 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 the Registered Holder and all the
Registered Holder's successors, heirs, pledgees, assignees, transferees and
purchasers of this Warrant and the Warrant Shares.
XII. 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.
XIII. 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.
XIV. 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.
XV. Jurisdiction and Venue. The Company (i) agrees 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 consents 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 further agrees 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.
9
XVI. 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:
Registered Holder: To his or her address on page 1 of this Warrant.
The Company: Milestone Scientific Inc.
00 Xxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxx, President
Fax: (000) 000-0000
In either case,
with a copy to: Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as any of them, by notice to the others 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.
XVII. Warrant Solicitation and Warrant Solicitation Fee. The Company has engaged
the Placement Agent, on a non-exclusive basis, as its agent for the solicitation
of the exercise of this Warrant (including any Extra Warrants). The Company, at
its cost, will (i) assist the Placement Agent with respect to such solicitation,
if requested by the Placement Agent and (ii) provide the Placement Agent, and
direct the Company's transfer and warrant agents to deliver to the Placement
Agent, lists of the record, and to the extent known, beneficial owners of the
Warrants. The Company shall instruct the transfer and warrant agents to
cooperate with the Placement Agent in every respect in connection with the
Placement Agent's solicitation activities, including, but not limited to,
providing to the Placement Agent, at the Company's cost, a list of record and
beneficial holders of the Warrants and providing disclosure documents, where
necessary, to the holders of the Warrants at the time of exercise of the
Warrants.
In each instance in which this Warrant is exercised, the Company shall
promptly give written notice of such exercise to the Placement Agent. If, upon
the exercise of this Warrant, (i) the market price of the Company's
10
Common Stock is greater than the Purchase Price, (ii) disclosure of compensation
arrangements was made at the time of offering and of exercise (as required by
applicable law, rule or regulation), (iii) the exercise of this Warrant was
solicited by the Placement Agent, (iv) this Warrant was not held in a
discretionary account, and (v) the solicitation of the exercise of this Warrant
was not in violation of Rule 10b-6 (as such rule or any successor rule may be in
effect as of such time of exercise) promulgated under the Securities Exchange
Act of 1934, as amended, then the Company shall, upon exercise of this Warrant,
pay from the proceeds received upon exercise of this Warrant a fee of 5% of the
Purchase Price to the Placement Agent, provided that the Placement Agent
delivers to the Company a certificate that the conditions set forth in the
preceding clauses (iii), (iv) and (v) have been satisfied. The Placement Agent
may, at any time during business hours, examine the records of the Company,
including its ledger of original Warrant certificates returned to the Company
upon exercise of the Warrants.
11
The Placement Agent is intended to be a third party beneficiary of this
Section 18 and, as such, this section may not be amended, modified or deleted
without the express written consent of the Placement Agent.
MILESTONE SCIENTIFIC INC.
By:
Name: Xxx Xxxxx
Title: President
12
EXHIBIT I
NOTICE OF EXERCISE
TO: Milestone Scientific Inc.
00 Xxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
I. 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.
I. 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:
I. 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.
I. I acknowledge that this exercise of the Warrant represented by this Notice
of Exercise was solicited by GKN Securities Corp.
The exercise of this Warrant represented by this Notice of Exercise was not
solicited by GKN Securities Corp.
(Name)
(Address)
(Taxpayer Identification Number)
[print name of Registered Holder]
By:
Title:
Date:
