SUBSCRIPTION AGREEMENT
_______ __, 1999
BLC Financial Services, Inc., a Delaware corporation (the
"Company"), hereby agrees with the Purchaser listed on the signature page hereto
(the "Purchaser") as follows:
Section 1. ISSUANCE OF NOTES.
Section 1.1. Authorization. The Company has duly authorized
the issue of up to $5,000,000 aggregate principal amount of its 9% Convertible
Subordinated Notes due February 1, 2003 (the "Notes"), substantially in the form
attached hereto as Exhibit A.
Section 1.2. Purchase and Sale of the Notes; the Closing. In
reliance upon the representations of the Purchaser contained in Section 1.3
hereof and, subject to the terms and conditions set forth herein, the Company
shall sell to the Purchaser on the date hereof and, subject to the terms and
conditions hereof, the Purchaser shall purchase from the Company on the date
hereof the principal amount of the Notes set forth below the Purchaser's
signature at an aggregate purchase price equal to 100% of the aggregate
principal amount of the Notes being purchased (the "Purchase Price").
On the date hereof, the Company will deliver to the Purchaser
such Notes, registered in the Purchaser's name or in the name of the Purchaser's
nominee, as may be specified by the Purchaser, duly executed and dated the date
hereof, against the Purchaser's delivery to the Company (or to persons at the
direction of the Company) of immediately available funds in the amount of the
Purchase Price.
Section 1.3. Representations of the Purchaser.
The Purchaser represents and warrants to the Company that on
the date hereof and as of the Closing Date:
(a) Distribution. The Purchaser is not acquiring the Notes
with a view to the distribution or sale of such in violation of the Securities
Act of 1933, as amended (the "Securities Act").
(b) Offering of Purchaser Notes. The Purchaser has not offered
the Notes for sale by any means of general solicitation or general advertising
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including, but not limited to, any advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
were invited by any general solicitation or general advertising.
(c) Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 under the Securities Act and falls into
the category of "accredited investor" initialled by the Purchaser below:
Initials
____ (1) a bank as defined in Section 3(a)(2) of the Securities
Act, or a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Securities Act,
whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended; an insurance
company as defined in Section 2(13) of the Securities Act;
an investment company registered under the Investment
Company Act of 1940, as amended, or a business development
company as defined in Section 2(a)(48) of that Act; a Small
Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1953; a plan
established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its
employees, if such plan has total assets in excess of $5
million; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, as amended,
if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of that Act, which is either a
bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit
plan has total assets in excess of $5 million or, if a
self-directed plan, with the investment decisions made
solely by persons that are accredited investors;
____ (2) a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940,
as amended;
____ (3) an organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, or a corporation,
Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring Notes or shares
of Common Stock, with total assets in excess of $5,000,000;
____ (4) a director or executive officer of the Company;
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____ (5) a natural person whose net worth, individually or
together with that person's spouse, currently exceeds
$1,000,000;
____ (6) a natural person who had an individual income (not
including such person's spouse's income) in excess of
$200,000 in 1997 and 1998, or joint income with such
person's spouse in excess of $300,000 in each of those
years, and who reasonably expects to reach the same income
level in 1999;
____ (7) a trust with total assets in excess of $5,000,000 not
formed for the specific purpose of acquiring shares of
Common Stock, whose purchase is directed by a person having
such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits
and risks entailed in the purchase of Notes or shares of
Common Stock; or
____ (8) an entity in which all of the equity owners are
"accredited investors."
The Purchaser (i) has such knowledge and experience in
financial and business matters that he or she is capable of evaluating the
merits and risks entailed in the purchase of Notes and (ii) has had an
opportunity to investigate the terms of the Notes, the business and financial
condition of the Company, to ask questions of the Company and to obtain such
information as the Purchaser requires from the Company.
Section 2. REPRESENTATIONS OF THE COMPANY. The Company
represents and warrants to the Purchaser that on the date hereof and as of the
Closing Date:
Section 2.1. Organization and Authority of the Company.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and the
Company has all requisite corporate power and authority to own or hold under
lease the property it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement and the Subscription Agreement, with respect to Notes issued to other
purchasers of Notes and all other documents and agreements contemplated hereby
and thereby (this Agreement, and all such other documents and agreements,
collectively, the "Transaction Documents") and to perform the provisions hereof
and thereof and to consummate the transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of the Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized and approved by the Company. Each of the
Transaction Documents has been duly authorized, executed and delivered by, and
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each is the valid and binding obligation of, the Company, enforceable against
the Company in accordance with its terms, except as may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws or by
legal or equitable principles relating to or limiting creditors' rights
generally.
Section 2.2. Private Placement Memorandum.
(a) The Company has provided the Purchaser with the
Confidential Private Placement Memorandum dated February 1, 1999 (the
"Memorandum") that (when read in conjunction with this Agreement and the
schedules and exhibits hereto and thereto) describes, among other things, in all
material respects the business, properties, assets, operations and financial
condition of the Company.
(b) As of the Closing Date, the Memorandum does not contain,
any untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section 3. MISCELLANEOUS.
Section 3.1. Reliance on and Survival of Representations. All
representations, warranties, covenants and agreements of the Company herein and
in any certificates or other instruments delivered pursuant to any of the other
Transaction Documents by the Company shall (i) be deemed to be material and to
have been relied upon by each Purchaser, notwithstanding any investigation
heretofore or hereafter made by any Purchaser or on its behalf, and (ii) survive
the execution and delivery of this Agreement and of the Notes, for so long as
the Notes are outstanding.
Section 3.2. Successors and Assigns. This Agreement shall bind
and inure to the benefit of and be enforceable by the Company, each Purchaser
and each of the Purchasers' respective successors and assigns, and, in addition,
shall inure to the benefit of and be enforceable by each person who shall from
time to time be a Purchaser of Notes.
Section 3.3. Notices. All notices and other communications
provided for in this Agreement shall be in writing and delivered by registered
or certified mail, postage prepaid, or delivered by overnight courier (for next
business day delivery) or telecopied, addressed as follows, or at such other
address as any of the parties hereto may hereafter designate by notice to the
other parties given in accordance with this Section:
(i) if to the Company:
BLC Financial Services, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx X. Xxxxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy of any notice to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Simeon Gold, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(ii) if to the Purchasers, at the address of such
Purchaser as it appears on the books and records of
the Company.
Any such notice or communication shall be deemed to have been
duly given on the fifth day after being so mailed, the next business day after
delivery by overnight courier, when sent by telecopier or upon receipt when
delivered personally.
Section 3.4. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
Section 3.5. Governing Law. This Agreement and the Notes and
(unless otherwise provided) all amendments, supplements, waivers and consents
relating hereto or thereto shall be governed by and construed in accordance with
the laws of the State of New York.
Section 3.6. Waiver of Jury Trial. EACH OF THE PURCHASER AND
THE COMPANY HEREBY AGREE TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
COLLATERAL DOCUMENTATION, THE NOTES OR ANY OTHER AGREEMENTS RELATING TO THE
NOTES OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims. The
Purchaser and the Company each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each has already relied
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on the waiver in entering into this Agreement, and that each will continue to
rely on the waiver in their related future dealings. The Purchaser and the
Company further warrant and represent that each has reviewed this waiver with
its legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO
THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
THE NOTES OR ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE NOTES. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
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IN WITNESS WHEREOF, the undersigned has executed this
Agreement on the day and year first written above.
Very truly yours,
-------------------------------------
PRINT OR TYPE NAME OF PURCHASER
By:
----------------------------------
Name:
-----------------------------
Title:
-----------------------------
Notes Purchased: $
---------------
The foregoing Subscription Agreement
is hereby accepted as of the date first
above written:
BLC FINANCIAL SERVICES, INC.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: President and Chief
Executive Officer
Conversion
Price of
Notes Purchased: $
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TABLE OF CONTENTS
Page
Section 1. ISSUANCE OF NOTES...........................................1
Section 1.1. Authorization...................................1
Section 1.2. Purchase and Sale of the Notes; the Closing.....1
Section 1.3. Representations of the Purchaser................1
Section 2. REPRESENTATIONS OF THE COMPANY..............................3
Section 2.1. Organization and Authority of the Company.......3
Section 2.2. Private Placement Memorandum....................4
Section 3. MISCELLANEOUS...............................................4
Section 3.1. Reliance on and Survival of Representations.....4
Section 3.2. Successors and Assigns..........................4
Section 3.3. Notices.........................................5
Section 3.4. Counterparts....................................5
Section 3.5. Governing Law...................................6
Section 3.6. Waiver of Jury Trial............................6
Exhibit A - Form of Note
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EXHIBIT B
BLC FINANCIAL SERVICES, INC.
SUBSCRIPTION AGREEMENT
Dated _______ __, 1999
9% Convertible Subordinated Notes due 2003
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