Exhibit 4.35
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 PURCHASE AGREEMENT, DATED AS OF
FEBRUARY 19, 2002, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
MILESTONE SCIENTIFIC INC.
MILESTONE SCIENTIFIC INC.
8% PROMISSORY NOTE
$150,000 February 19, 2002
Livingston, New Jersey
FOR VALUE RECEIVED, MILESTONE SCIENTIFIC INC., a Delaware
corporation (the "Company" or "Maker") with its principal executive office at
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, promises to pay to:
X. Xxxxxx Xxxxxxxx
c/o Cumberland Associates LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
(the "Payee" or the "holder of this Note") or permitted successors and assigns
of the Payee, the principal amount of:
ONE HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($150,000)
(the "Principal Amount"), or, if less, the amount then outstanding, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, or such other form as
shall be acceptable by the Payee in his sole and absolute discretion together
with interest as set forth in Paragraph 1 of this Note at such time and in such
amounts as set forth in Paragraph 3 of this Note, at Payee's address designated
above or at such other place as the Payee shall have notified the Company before
such payment is due.
1. Interest.
A. Except as otherwise provided in Paragraphs B and C of this
Paragraph 1, interest on the principal amount hereof shall accrue at the rate of
8% per annum (the "Basic Rate") from the date hereof until paid in full.
Interest shall be payable at the Maturity Date (as defined in Paragraph 3
below).
B. If an Event of Default (as defined in Paragraph 5 below) shall
have occurred and shall continue while this Note is outstanding, interest on
this Note shall accrue at a rate equal to the maximum rate permitted by law
(such rate is hereinafter referred to as the "Default Rate").
C. At the option of the Company, interest shall be payable on the
Maturity Date in shares of the Company's common stock, par value $.001 per share
(the "Common Stock"), valued at the average closing bid price per share of
Common Stock for the five trading days ending the day prior to the Maturity
Date. In such event, interest shall be calculated at the rate of 10% per annum
instead of the Basic Rate.
D. Interest as aforesaid shall be calculated on the basis of actual number
of days elapsed over a year of 360 days.
2. Principal Payments.
A. The outstanding Principal Amount of this Note shall be due and
payable on the Maturity Date. The outstanding Principal Amount, with interest to
date, shall be prepayable at any time without penalty upon 15 days notice to
Payee. On any prepayment, interest shall be paid to the date of prepayment.
B. At the option of the Company, the outstanding Principal Amount
shall be payable on the Maturity Date in shares of the Company's common stock,
par value $.001 per share (the "Common Stock"), valued at the average closing
bid price per share of Common Stock for the five trading days ending the day
prior to the Maturity Date.
3. Maturity. This Note shall mature, and the unpaid Principal Amount and
all accrued but unpaid interest thereon, shall be due in full on June 30, 2003
(the "Maturity Date").
4. Mandatory Conversion. The outstanding Principal Amount of this Note,
and any accrued but unpaid interest, shall be converted automatically into
shares of Common Stock upon the occurrence of and on the same terms as those in
the Maker's next equity financing transaction of $500,000 or more (the
"Mandatory Conversion").
5. Events of Default and Remedies.
A. Events of Default. Each of the following events is herein
referred to as an Event of Default:
(i) any default in the payment of any principal hereunder when
the same shall be due and payable, whether at the Maturity Date or by
acceleration or otherwise;
(ii) any default in the payment of any interest hereunder when
the same shall be due and payable not remedied within three (3) days of written
notice
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given pursuant to Paragraph 5(B) herein, whether at the Maturity Date, the
interest payment date or by acceleration or otherwise;
(iii) any material default in the due observance or
performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms hereof, and the continuance of such default
unremedied for a period of twenty (20) days after written notice thereof to the
Company setting forth in reasonable detail the circumstances of such Event of
Default;
(iv) if the Company shall: (A) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of it or any of its
properties, (B) admit in writing its inability to pay its debts as they mature,
(C) make a general assignment for the benefit of creditors, (D) be adjudicated a
bankrupt or insolvent or be the subject of an order for relief under Title 11 of
the United States Code, or (E) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage or any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against him or it in any proceeding
under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;
(v) if any order, judgment or decree shall be entered, without
the application, approval or consent of the Company, by any court of competent
jurisdiction, approving a petition seeking reorganization of the Company, or
appointing a receiver, trustee, custodian or liquidator of any of the Company,
or of all or any substantial part of its assets, and such order, judgment or
decree shall continue unstayed and in effect for any period of sixty (60)
consecutive days;
(vi) there shall be a default (taking into account lapse of
notice, written notice to the Company or both) under any bond, debenture, note
or other evidence of indebtedness for money borrowed or under any mortgage,
indenture or other instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money borrowed by the Company,
whether existing on the date hereof or created subsequent to the date hereof,
which default relates to the obligation to pay the principal of or interest on
any such indebtedness and the effect of such default is to cause such
indebtedness to become due prior to its stated maturity; or
(vii) if final judgment(s) for the payment of money in excess
of $200,000 individually or $250,000 in the aggregate shall be rendered against
the Company, and the same shall remain undischarged or unbonded for a period of
thirty (30) consecutive days, during which execution shall not be effectively
stayed.
B. Remedies. Upon the occurrence of any Event of Default, and at all
times thereafter during the continuance thereof: (i) this Note shall, at the
option of the holder of this Note, become immediately due and payable, both as
to principal, interest and premium, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, anything contained
herein to the contrary notwithstanding; (ii) all outstanding obligations under
this Note, and all other outstanding obligations on which the applicable
interest rate is determined by reference to the interest rate under this Note,
shall bear interest at the Default Rate; (iii) the holder of this Note may file
suit against the Company on the Note and/or
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seek specific performance or injunctive relief hereunder (whether or not a
remedy exists at law or is adequate); (iv) the holder of this Note shall have
the right, in accordance with this Note to exercise any and all remedies as such
holder may determine in such holder's discretion (without any requirement of
marshalling of assets, or other such requirement).
6. Miscellaneous.
A. Parties in Interest. All covenants, agreements and undertakings
in this Note binding upon the Company or the Payee shall bind and inure to the
benefit of the permitted successors and assigns of the Company and the Payee,
respectively, whether so expressed or not.
B. Notice Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed or
sent by certified, registered, or express mail, postage prepaid, and shall be
deemed given when so delivered personally, telegraphed or, if mailed, five days
after the date of deposit in the United States mail as follows:
(i) if to the Maker: Milestone Scientific Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
(ii) if to the Payee: At the address set forth on the first page
C. Construction. This Note shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York and any applicable laws of the United States of America,
without giving effect to the conflicts or choice of law principles thereof.
D. Enforceability. Maker acknowledges that this Note and Maker's
obligations hereunder are and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to this Note and the obligations of
Maker evidenced hereby, unless otherwise expressly evidenced in a writing duly
executed by the holder of this Note.
E. Payment. If the date for any payment due hereunder would
otherwise fall on a day which is not a Business Day, such payment or expiration
date shall be extended to the next following Business Day with interest payable
at the applicable rate specified herein during such extension. "Business Day"
shall mean any day other than a Saturday, Sunday, or any day which shall be in
the City of New York a legal holiday or a day on which banking institutions are
authorized by law to close.
F. Waiver and Set-off. Maker hereby waives diligence, presentment,
demand, protest and notice of any kind whatsoever. The nonexercise by Payee of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance. The Payee, in addition to any
other right available to it under applicable law, shall have the right, at its
option, to immediately set off against this Note any monies owed by the Payee in
any capacity to Maker, whether or not due, upon the occurrence of any Event of
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Default, even though such charge is made or entered on the books of Payee
subsequent to those events.
G. Lost Documents. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Note exchanged for it, and (i) in the case of loss, theft or destruction, of
indemnity satisfactory to it and (ii) in the case of mutilation, of surrender
for cancellation of such Note, and, in any case, upon reimbursement to the
Company of all reasonable expenses incidental thereto, the Company will make and
deliver in lieu of such Note a new Note of like tenor and principal amount and
dated as of the original date of this Note.
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IN WITNESS WHEREOF, this Note has been executed and delivered on the date
specified above by the duly authorized representative of the Company.
MILESTONE SCIENTIFIC INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Xxxxx
Chairman and Chief Executive Officer
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