STOCK PURCHASE AGREEMENT
Agreement entered into on September , 1997, by and among
____________________, a ____________ [corporation] (the "Buyer"), and Milestone
Scientific Inc., a Delaware corporation (the "Seller"). The Buyer and the Seller
are referred to collectively herein as the "Parties".
This Agreement contemplates a transaction in which the Buyer will purchase
from the Seller, and the Seller will sell to the Buyer, (i) __________ shares
(the "Shares") of Seller's common stock, par value $.001 per share (the "Common
Stock"), and (ii) warrants (the "Warrants") to purchase ___________ 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
$__________ (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).
"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.
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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").
(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
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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.
(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
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the periods covered thereby and fairly present in all material respects
the financial condition and results of operations of the Seller as of
their respective dates. Since June 30, 1997, there has not been any
material adverse change in the business, financial condition or results of
operations of the Seller except that the Company has continued to operate
at a loss. Except for the liabilities set forth in the financial
statements included in the SEC Filings and liabilities which have arisen
after June 30, 1997 in the Ordinary Course of Business, the Seller has no
material liability.
(vii) Capitalization. The entire authorized capital of the Seller
consists of 10,000,000 shares of Common Stock. As of August 1, 1997,
5,568,152 shares of Common Stock were issued and outstanding and
approximately 1,955,478 shares are issuable upon exercise of outstanding
options and warrants. The Board of Directors of the Seller has authorized
the sale on or before September 15, 1997 of 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 (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 corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Buyer has full
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power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions. The Buyer need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated
by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (B) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the Buyer is a
party or by which it is bound or to which any of its assets is subject.
(iv) Brokers' Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Seller could
become liable or obligated.
(v) Investment. The Buyer is an Accredited Investor. The Buyer
is not acquiring the Shares, the Warrants or the Warrant Shares with a
view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act.
(vi) SEC Filings. The Buyer has been given copies of the SEC Filings
and has reviewed such SEC Filings. The Buyer has been given the
opportunity to ask questions and receive answers from the Seller
concerning Seller's operations and financial condition and the
transactions contemplated hereby. The Buyer has been provided with all of
the information deemed necessary by the Buyer in connection with the
transactions contemplated hereby.
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4. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing:
(a) General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under 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
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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 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.
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(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).
(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.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Att'n: Xxxxxxx Xxxxx, President
Fax: (000) 000-0000
with a copy to:
Morse, Zelnick, Rose & Lander LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att'n: Xxxxxxx Xxxxxxx, Esq.
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Fax: (000) 000-0000
If to the Buyer:
_________________________
_________________________
_________________________
Att'n: __________________
Fax: ____________________
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
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and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean including
without limitation.
(m) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein
by reference and made a part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
[BUYER]______________________
By: _______________________
Title:_______________________
MILESTONE SCIENTIFIC INC.
By:
---------------------------------
Xxxxxxx Xxxxx, President
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