Exhibit 6
SETTLEMENT AND STANDSTILL AGREEMENT
THIS SETTLEMENT AND STANDSTILL AGREEMENT (this "AGREEMENT") is made and
entered into as of June 15, 2004 by and among (i) Xxxxxxx & Xxxxxx, LLC, a
limited liability company organized under the laws of the State of New York,
(ii) Xxxxxxx & Xxxxxx Value Partners, L.P., a limited partnership organized
under the laws of the State of New York ("ISVP"), (iii) Xxxxxx X. Xxxxxx, (iv)
Xxxxxx X. Xxxxxxx, Xx., (each of (i) - (iv), an "INVESTOR" and collectively, the
"INVESTORS") and (v) Boston Life Sciences, Inc., a corporation organized under
the laws of the State of Delaware (the "COMPANY").
RECITALS
WHEREAS, each of the Investors is the Beneficial Owner of the shares of
common stock, par value $0.01 per share ("COMMON STOCK"), of the Company set
forth with respect to such Investor in the statement on Schedule 13D, as
amended, filed by the Investors with the Securities and Exchange Commission (the
"SCHEDULE 13D") (the term "BENEFICIAL OWNER" as used in this Agreement having
the meaning given the term in Rule 13(d)(3) under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the terms "BENEFICIALLY OWN" and
"BENEFICIAL OWNERSHIP" applying to securities held by a Beneficial Owner of such
securities);
WHEREAS, the Investors have stated in the Schedule 13D that they plan to
seek changes in the Company's Board of Directors and have filed certain
litigation against the Company and its directors; and
WHEREAS, the Company and the Investors have determined that it is the best
interest of the Company's shareholders to resolve their disputes with respect to
the composition of the Company's Board of Directors and other matters on the
terms and subject to the conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Company and the Investors hereby agree as follows:
1. BOARD COMPOSITION AND 2004 ANNUAL MEETING OF SHAREHOLDERS.
1.1 NEW DIRECTORS; CHIEF EXECUTIVE OFFICER.
(a) The Company has taken all appropriate action and the
Company's Board of Directors has adopted resolutions (copies of which
have been given to the Investors), which will be effective as of the
execution and delivery of this Agreement by all parties (the
"EFFECTIVE TIME"), to provide for the following: (i) fixing the size
of the Company's Board of Directors at five (5), (ii) the resignation
of Xxxxx X. Xxxx, S. Xxxxx Xxxxxxx and E. Xxxxxxxxxxx Xxxxxx as
directors of the Company and (iii) the election and appointment of
Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx as directors
of the Company to fill the vacancies resulting from the resignations
of Xxxxx X. Xxxx, S. Xxxxx Xxxxxxx and E. Xxxxxxxxxxx Xxxxxx. For the
elimination of doubt, pursuant to the foregoing sentence, at the
Effective Time, the Company shall cause its Board of Directors to
consist of the following persons: Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxx,
Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx (the "NEW
DIRECTORS"). For purposes of the Company's Amended and Restated 1990
Non-Employee Directors' Non-Qualified Stock Option Plan and the
Company's 1998 Omnibus Stock Option Plan, the resignation of Messrs.
Bier, Xxxxxxx and Xxxxxx pursuant to this Section 1.1(a) shall be
treated as a termination without cause.
(b) Upon the hiring by the Company after the date of this
Agreement of a new Chief Executive Officer of the Company (the "NEW
CEO"), the Company shall increase the size of the Company's
Board of Directors by two (2) and the Company's Board of Directors
shall elect and appoint as Directors of the Company to fill the
newly-created directorships the New CEO and an independent director
recommended by the New CEO and reasonably acceptable to the Company's
Board of Directors (the "CEO DESIGNEE").
1.2 NOMINEES FOR ELECTION AND OTHER PROPOSALS AT 2004 ANNUAL MEETING.
(a) The Company has taken all appropriate action and the
Company's Board of Directors has adopted resolutions (copies of which
have been given to the Investors), which will be effective as of the
Effective Time, to provide for the call and holding of the 2004 annual
meeting of the Company's shareholders (the "2004 ANNUAL MEETING") on
July 30, 2004, and a record date for shareholders entitled to
notice of and to vote at the 2004 Annual Meeting of June 14, 2004.
(b) The Company shall nominate for election as directors of the
Company at the 2004 Annual Meeting the New Directors and, if the New
CEO and CEO Designee have been added as directors of the Company prior
to the mailing to its shareholders of the Company's proxy materials
for the 2004 Annual Meeting, the New CEO and the CEO Designee
(collectively, the "NOMINEES") and shall fix the number of directors
comprising the entire Board of Directors of the Company to be elected
at the 2004 Annual Meeting at the number of Nominees. The Company
shall use its best efforts to ensure that the Nominees are elected as
directors of the Company at the 2004 Annual Meeting. In furtherance of
the foregoing: (i) in connection with the 2004 Annual Meeting, the
Company's Board of Directors shall recommend that the Company's
shareholders vote to elect the Nominees as directors of the Company;
(ii) the Company shall include the foregoing recommendation in its
proxy materials for the 2004 Annual Meeting; and (iii) the Company's
form of proxy shall solicit authority to vote for the Nominees and no
other persons.
(c) If, at any time prior to the 2004 Annual Meeting, one or
more of the Nominees for any reason is unwilling or unable to be
nominated or to stand for election at the 2004 Annual Meeting, the
Board of Directors of the Company may select a replacement Nominee.
1.3 OTHER PROPOSALS FOR THE 2004 ANNUAL MEETING. Following the
Effective Time and prior to the date that the Company mails its proxy
materials to shareholders in connection with its 2004 Annual Meeting, the
Company's Board of Directors shall approve the following matters and
recommend them to the shareholders for approval at such meeting (the
"SHAREHOLDER PROPOSALS"):
(a) an amendment of the Company's Amended and Restated Certificate of
Incorporation, filed with the Secretary of State of Delaware on
March 29, 1996 as heretofore amended, to increase to 80,000,000 the
number of shares of Common Stock authorized for issuance; and
(b) an amendment of the Company's 1998 Omnibus Stock Option Plan to
increase to 6,100,000 the number of shares issuable upon the
exercise of options granted thereunder.
In furtherance of the foregoing, the Company shall include the foregoing
recommendation in its proxy materials and the Company's form of proxy
shall solicit authority to vote for these matters.
1.4 ACTION BY INVESTORS. Each of the Investors shall vote the shares
of Common Stock over which it or he has voting power in favor of the
election of the Nominees as directors of the Company and in favor of the
Shareholder Proposals at the 2004 Annual Meeting, and shall use good faith
efforts to cause its or his Affiliates to so vote shares of Common Stock
over which they have voting power. Each Investor agrees not to (and Messrs.
Xxxxxx and Xxxxxxx agree to cause their respective spouses and children not
to) seek the removal of any Nominee as a director of the Company prior to
March 31, 2005, acting as a shareholder of the Company, it being understood
that this sentence shall in no way restrict any person's actions as a
director of the Company.
2. REPRESENTATIONS AND WARRANTIES.
2.1 BY THE INVESTORS. Each Investor, on behalf of itself and not any
other Investor, represents and warrants to the Company as follows:
(a) Such Investor has the full power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and
to consummate the transactions contemplated hereby, and (if not an
individual) has taken all necessary action to authorize the execution,
delivery and performance of this Agreement;
(b) Such Investor (if not an individual) is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization;
(c) This Agreement constitutes a valid and binding obligation of
such Investor, enforceable in accordance with its terms, subject to
applicable principles of equity, bankruptcy, reorganization,
insolvency or other laws affecting the enforcement of creditors'
rights generally;
(d) Neither the execution and the delivery of this Agreement by
such Investor, nor the consummation by such Investor of the actions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which such Investor is subject or (if not an individual) any
provision of the organizational documents of such Investor or (ii)
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 consent or
notice (other than those obtained or made) under, any agreement,
contract, lease, license, instrument, judgment, decree, order or other
arrangement to which such Investor is a party or by which it is bound
or to which any of its assets are subject (or result in the imposition
of any security interest upon any of its assets), nor is such Investor
required to obtain the approval or consent of any person or entity to
effect the actions contemplated hereby (other than those obtained);
and
(e) The Schedule 13D correctly sets forth the shares of Common
Stock Beneficially Owned by such Investor.
2.2 BY THE COMPANY. The Company represents and warrants to each Investor
as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
has the full power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and consummate the transactions
contemplated hereby, and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement; and the
resolutions of the Board of Directors of the Company referred to in
Section 1.1(a) were unanimously approved by the Directors of the
Company;
(b) This Agreement constitutes a valid and binding obligation of
the Company, enforceable in accordance with its terms, subject to
applicable principles of equity, bankruptcy, reorganization,
insolvency or other laws affecting the enforcement of creditors'
rights generally;
(c) Neither the execution and the delivery of this Agreement by
the Company, nor the consummation by the Company of the actions
contemplated hereby, will (i) 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 Company is subject or any provision of the Certificate of
Incorporation or By-Laws of the Company, (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of
the Company's obligations under, create in any party the right to
accelerate rights under, receive additional benefits under, terminate,
modify, or cancel, or require any consent or notice (other than those
obtained or made) under (whether due to the occurrence of a "Change of
Control" or similar concept or otherwise), any agreement, contract,
lease, license, instrument, judgment, decree, order or other
arrangement to which the Company is a party or by which it is bound or
to which any of its assets are subject (or result in the imposition of
any security interest upon any of its assets) (except as may apply
under any Indemnity Agreement between the Company and any of its
officers or directors which conforms to the form filed as Exhibit
10.32 to the Company's Annual Report on Form 10-K for 2003 or as
provided with respect to certain stock options of Messrs. Bier,
Xxxxxxx and Xxxxxx due to the final sentence of Section 1.1(a)), or
(iii) cause or result in (whether or not after the lapse of time) the
occurrence of a Distribution Date (as defined in the Rights Agreement
dated as of September 11, 2001 between the Company and Continental
Stock Transfer & Trust Company, as rights agent, as presently in
effect, nor is the Company required to obtain the approval or consent
of any person or entity to effect the actions contemplated hereby
(other than those obtained);
(d) The Company has not granted a release of any Claim (as
defined in Exhibit A hereto) that the Company now has or ever had
against any of the Released Company Parties (as defined in Exhibit A
hereto);
(e) The Separation Agreement (as defined in Section 3.3(a)) sets
forth the sole agreement and arrangement under which the Company or
any of its Subsidiaries has any obligation to make any payment or
provide any other benefit, directly or indirectly, to S. Xxxxx
Xxxxxxx, any member of his family or any of their respective
Affiliates, and the Employment Agreement (as defined in Section
3.3(b)) sets forth the sole agreement or arrangement under which the
Company or any of its Subsidiaries has any obligation to make any
payment or provide any other benefit, directly or indirectly, to Xxxx
X. Xxxxxx, any member of his family or any of their respective
Affiliates, except for the two Indemnity Agreements dated as of March
26, 2004, between the Company, on the one hand, and Xx. Xxxxxxx or Xx.
Xxxxxx, on the other (which conform to the form filed as Exhibit 10.32
to the Company's Annual Report on Form 10-K for 2003), the stock
options referred to in Section 2(f), insurance policies maintained by
the Company, the Company's Certificate of Incorporation and By-Laws
and, in the case of Xx. Xxxxxx, benefits available generally to
employees of the Company under the Company's employee benefit plans;
and
(f) There are no outstanding options to purchase any securities
of the Company granted by the Company to any officer or director of
the Company and no such options have been granted by the Company since
December 31, 2002, except as disclosed in the amendment to the
Company's Annual Report on Form 10-K for 2003, filed with the SEC on
April 28, 2004, and for the options set forth on SCHEDULE 1 hereto.
3. OTHER CONCURRENT ACTIONS.
3.1 MUTUAL RELEASE OF CLAIMS. At the Effective Time, the Company, S.
Xxxxx Xxxxxxx, Xxxx X. Xxxxxx and the Investors will execute and deliver
the Mutual Release of Claims, in the form set forth on EXHIBIT A hereto.
3.2 CONVERTIBLE NOTE. At the Effective Time, the Company shall
provide to ISVP cash collateral or letters of credit sufficient for the
release of the collateral under the 10% Convertible Senior Secured
Promissory Note dated July 25, 2002 in the aggregate principal amount of
$4,000,000 issued by the Company to ISVP and all other promissory notes
issued pursuant thereto as payment of interest thereon (or as interest on
such other promissory notes).
3.3 CONSULTING/EMPLOYMENT ARRANGEMENTS.
(a) S. Xxxxx Xxxxxxx has reached a separation agreement with the
Company (the "SEPARATION AGREEMENT"), in the form of EXHIBIT B, to
resign as a director of the Company. At the Effective Time, Xx.
Xxxxxxx and the Company shall furnish an executed copy of the
Separation Agreement to the Investors and shall enter into a letter
agreement regarding the Separation Agreement in the form of EXHIBIT
B-1.
(b) At the Effective Time, Xxxx X. Xxxxxx and the Company shall
enter into an employment agreement in the form of EXHIBIT C (the
"EMPLOYMENT AGREEMENT").
3.4 PUBLICITY. On the date hereof after the Effective Time, the
Company shall issue the press release in the form of EXHIBIT D.
3.5 EXPENSES. At the Effective Time, the Company shall pay $300,000
to Xxxxxxx & Xxxxxx, LLC by wire transfer of immediately available funds,
as reimbursement of certain expenses of Investors.
3.6 SECTION 220 REQUEST. Xx. Xxxxxx confirms that his requests by
letter dated November 18, 2003 and March 22, 2004, for certain records of
the Company pursuant to Section 220 of the Delaware General Corporation Law
have been terminated and no futher response thereto from the Company is
required.
4. MISCELLANEOUS.
4.1 NOTICES. All notices, requests, demands, claims and other
communications required or permitted to be delivered, given or otherwise
provided under this Agreement must be in writing and must be delivered,
given or otherwise provided:
(a) by hand (in which case, it shall be effective upon
delivery);
(b) by facsimile (in which case, it shall be effective upon
receipt of confirmation of good transmission); or
(c) by overnight delivery by a nationally recognized courier
service (in which case, it shall be effective upon delivery);
in each case, to the address (or facsimile number) listed below:
If to the Company, to it at:
Boston Life Sciences, Inc.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Investors, to any of them c/o:
Xxxxxxx & Xxxxxx, LLC
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone number: (000) 000-0000
Facsimile number: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
Each of the parties to this Agreement may specify a different address or
facsimile number by giving notice in accordance with this Section 4.1 to
each of the other parties hereto.
4.2 SUCCESSION AND ASSIGNMENT; NO THIRD-PARTY BENEFICIARIES. Subject
to the immediately following sentence, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, each of which such successors and
permitted assigns shall be deemed to be a party hereto for all purposes
hereof. No party may assign, delegate or otherwise transfer either this
Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other parties. The terms and provisions
of this Agreement shall not be binding upon any transferee of an Investor
that acquires any securities subject to this Agreement, except that each
Investor shall cause any of its Affiliates that acquires Common Stock from
an Investor to comply with such Investor's obligations under Section 1.4.
Except as expressly provided herein, this Agreement is for the sole benefit
of the parties and their permitted successors and assignees and nothing
herein expressed or implied shall give or be construed to give any person
or entity, other than the parties and such successors and assignees, any
legal or equitable rights hereunder.
4.3 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement shall be valid and binding unless it is in writing and
signed, in the case of an amendment, by the Company and the Investors, or
in the case of a waiver, by the party against whom the waiver is to be
effective.
4.4 ENTIRE AGREEMENT. This Agreement, together with all documents,
instruments and certificates explicitly referred to herein, constitutes the
entire agreement among the parties hereto with respect to the subject
matter hereof and supersedes any and all prior discussions, negotiations,
proposals, undertakings, understandings and agreements, whether written or
oral, with respect thereto. For the elimination of doubt, the letter
agreements dated March 12, 2003 between the Company and each of Xxxxxx X.
Xxxxxx and ISVP shall continue in effect.
4.5 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute but one and the same instrument.
4.6 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. In the event that any
provision hereof would, under applicable law, be invalid or unenforceable
in any respect, each party hereto intends that such provision shall be
construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and possible under, applicable law.
4.7 HEADINGS. The headings contained in this Agreement are for
convenience purposes only and shall not in any way affect the meaning or
interpretation hereof.
4.8 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 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.
4.9 INCORPORATION OF EXHIBITS. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
4.10 SPECIFIC PERFORMANCE. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of the
parties agrees that, without posting bond or other undertaking, the other
parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any claim, action,
cause of action or suit (whether in contract or tort or otherwise),
litigation (whether at law or in equity, whether civil or criminal),
controversy, assessment, arbitration, investigation, hearing, charge,
complaint, demand, notice or proceeding to, from, by or before any
governmental authority (an "ACTION") instituted in any court of the United
States or any state thereof having jurisdiction over the parties and the
matter in addition to any other remedy to which it may be entitled, at law
or in equity. Each party further agrees that, in the event of any action
for specific performance in respect of such breach, it shall not assert the
defense that a remedy at law would be adequate.
4.11 GOVERNING LAW. This Agreement, the rights of the parties and all
Actions arising in whole or in part under or in connection herewith, shall
be governed by and construed in accordance with the domestic substantive
laws of the State of Delaware, without giving effect to any choice or
conflict of law provision or rule that would cause the application of the
laws of any other jurisdiction.
4.12 JURISDICTION; VENUE; SERVICE OF PROCESS.
(a) JURISDICTION. Each party to this Agreement, by its execution
hereof, (i) hereby irrevocably submits to the exclusive jurisdiction
of the state courts of the State of Delaware or the United States
District Court located in the State of Delaware for the purpose of any
Action between the parties arising in whole or in part under or in
connection with this Agreement, (ii) hereby waives to the extent not
prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such Action, any claim that
it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or
execution, that any such Action brought in one of the above-named
courts should be dismissed on grounds of FORUM NON CONVENIENS, should
be transferred or removed to any court other than one of the
above-named courts, or should be stayed by reason of the pendency of
some other proceeding in any other court other than one of the
above-named courts, that venue for the Action is improper in any of
the above-named courts, or that this Agreement or the subject matter
hereof may not be enforced in or by such court and (iii) hereby agrees
not to commence any such Action other than before one of the
above-named courts.
(b) SERVICE OF PROCESS. Each party hereby (i) consents to
service of process in any Action between the parties arising in whole
or in part under or in connection with this Agreement in any manner
permitted by Delaware law, (ii) agrees that service of process made in
accordance with clause (i) or made by registered or certified mail,
return receipt requested, at its address specified pursuant to Section
4.1, shall constitute good and valid service of process in any such
Action and (iii) waives and agrees not to assert (by way of motion, as
a defense, or otherwise) in any such Action any claim that service of
process made in accordance with clause (i) or (ii) does not constitute
good and valid service of process.
(c) ACTIONS IN OTHER COURTS AND LOCATIONS. Notwithstanding
Section 4.12(a), a party may commence an Action in a court and
location other than as specified in Section 4.12(a) solely for the
purpose of enforcing an order or judgment issued by one of the courts
specified in Section 4.12(a).
4.13 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY
SHALL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT
TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A
COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO
WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM
RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS SHALL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING
WITHOUT A JURY.
4.14 CERTAIN DEFINITIONS. The terms "Affiliate" and "Subsidiary" as
used in this Agreement shall have the meaning provided in Rule 12b-2 under
the Exchange Act.
[signature page follows]
IN WITNESS WHEREOF, each of the undersigned has executed this Settlement
and Standstill Agreement as of the date first above written.
THE COMPANY:
BOSTON LIFE SCIENCES, INC.
By:
-----------------------------------------
Name:
Title:
THE INVESTORS:
XXXXXXX & XXXXXX, LLC
By:
-----------------------------------------
Name:
Title:
XXXXXXX & XXXXXX VALUE PARTNERS, L.P.
By:
-----------------------------------------
Name:
Title:
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XXXXXX X. XXXXXX
--------------------------------------------
XXXXXX X. XXXXXXX, XX.
EXHIBIT A
FORM OF
MUTUAL RELEASE OF CLAIMS
THIS MUTUAL RELEASE OF CLAIMS (this "AGREEMENT") is made and entered into
as of June 15, 2004 by and among (i) Xxxxxxx & Xxxxxx, LLC, a limited liability
company organized under the laws of the State of New York; (ii) Xxxxxxx & Xxxxxx
Value Partners, L.P., a limited partnership organized under the laws of the
State of New York; (iii) Xxxxxx X. Xxxxxx; (iv) Xxxxxx X. Xxxxxxx, Xx., ((i) -
(iv) collectively, the "RELEASING XXXXXXX PARTIES"); (v) S. Xxxxx Xxxxxxx; (vi)
Xxxx X. Xxxxxx; and (vii) Boston Life Sciences, Inc., a corporation organized
under the laws of the State of Delaware (the "Company").
RECITALS
WHEREAS, the Releasing Xxxxxxx Parties and the Company have entered into a
Settlement and Standstill Agreement dated as of the date hereof (the "SETTLEMENT
AGREEMENT"); and
WHEREAS, pursuant to the Settlement Agreement, the Releasing Xxxxxxx
Parties, S. Xxxxx Xxxxxxx, Xxxx X. Xxxxxx and the Company are required to enter
into this Mutual Release of Claims with the intention of resolving and releasing
certain claims between and among them.
NOW THEREFORE, for good and valuable consideration the receipt of which is
acknowledged by all parties, the Releasing Xxxxxxx Parties, Messrs. Xxxxxxx and
Xxxxxx and the Company agree as follows:
1. The Releasing Xxxxxxx Parties do hereby release, remise, and forever
discharge the Company, its affiliated entities, its present and former officers,
directors, partners, employees, agents and attorneys, and the respective
successors, heirs and assigns of each of the foregoing (the "RELEASED COMPANY
PARTIES"), of and from any and all actions, causes of actions, suits, torts,
damages, claims, demands, and liabilities whatsoever, of every name and nature,
both at law and in equity, whether known or unknown (collectively "CLAIMS"),
that any of the Releasing Xxxxxxx Parties now has or ever had against any of the
Released Company Parties arising from or attributable to (i) the organization of
FlouroPharma, Inc. (to the extent described in documents filed by the Company
with the Securities and Exchange Commission or other documents provided to the
Releasing Xxxxxxx Parties, in any case prior to the date hereof) or (ii) the
facts and circumstances forming the basis of the complaints, dated November 13,
2003 (the "FIRST ACTION"), and December 31, 2003, filed by the Releasing Xxxxxxx
Parties in the Court of Chancery of the State of Delaware (the "RELEASED XXXXXXX
Claims"). Notwithstanding anything to the contrary in the preceding sentence,
the Released Xxxxxxx Claims do not, without limitation, include any Claims
arising from or attributable to the Settlement Agreement or any securities of
the Company owned by the Investors (excluding the right to assert any Released
Xxxxxxx Claim by virtue of the ownership of any such security) or any documents
or instruments executed in connection with such ownership.
2. The Releasing Xxxxxxx Parties do hereby release, remise, and forever
discharge Xxxxx X. Xxxx, S. Xxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxx X. Xxxxxx and E.
Xxxxxxxxxxx Xxxxxx (the "INDIVIDUALS") of and from any and all Claims arising
from or attributable to any act or failure to act as a director, officer,
employee or consultant of the Company that any of the Releasing Xxxxxxx Parties
now has or ever had against any of them, except for Claims based on criminal
fraud or theft committed by any such person. The Releasing Xxxxxxx Parties also
hereby covenant and agree not to initiate, commence, maintain, or cause to be
maintained, in any capacity whatsoever (be it direct, derivative or
representative), whether on their behalf or on behalf of others, or recommend or
encourage another person to initiate, commence, maintain or cause to be
maintained, any Claim against any of the Individuals based upon any Claim
existing as of the date of this Agreement and arising from or attributable to
any act or failure to act as a director, officer, employee or consultant of the
Company, except for Claims based on criminal fraud or theft committed by any
such person, PROVIDED that nothing herein shall restrict a person's good faith
actions taken in order to satisfy his fiduciary duties as a director of the
Company.
3. The Company, S. Xxxxx Xxxxxxx and Xxxx X. Xxxxxx (the "RELEASING
COMPANY PARTIES"), do hereby release, remise, and forever discharge the
Releasing Xxxxxxx Parties, their affiliated entities, their present and former
officers, directors, partners, employees, agents and attorneys, and the
respective successors, heirs and assigns of each of the foregoing (the "RELEASED
XXXXXXX PARTIES"), of and from any and all Claims that any of the Releasing
Company Parties now has or ever had against any of the Released Xxxxxxx Parties
(the "RELEASED COMPANY CLAIMS") arising from or attributable to (i) the
commencement or prosecution of the litigation referred to in clause (ii) of the
first sentence of Section 1 above or (ii) actions by the Released Xxxxxxx
Parties in connection with their efforts to change the management of the
Company, except for Claims based on criminal fraud or theft committed by any
such person. Notwithstanding anything to the contrary in the preceding sentence,
the Released Company Claims do not, without limitation, include any Claims
arising from or attributable to the Settlement Agreement.
4. Promptly after the execution of this Agreement, the Releasing Xxxxxxx
Parties shall file or cause to be filed in the Court of Chancery of the State of
Delaware a notice of dismissal with prejudice of all claims against the Released
Company Parties asserted by the Releasing Xxxxxxx Parties in the First Action.
Prior to such filing, the proposed form of any such notice shall be submitted by
the Releasing Xxxxxxx Parties to the Company for approval, which approval shall
not be unreasonably withheld.
5. This Mutual Release of Claims shall be construed and enforced in
accordance with, and be governed by, the laws of the State of Delaware, and it
may not be modified, amended or terminated, nor may the provisions hereof be
waived, other than in a written instrument executed by all parties hereto. This
Mutual Release of Claims may be executed in two or more counterparts (including
by facsimile), which together shall comprise the same instrument.
[signature page follows]
IN WITNESS WHEREOF, each of the undersigned has executed this Mutual
Release of Claims as of the date first above written.
BOSTON LIFE SCIENCES, INC.
By:
-----------------------------------------
Name:
Title:
--------------------------------------------
S. XXXXX XXXXXXX
--------------------------------------------
XXXX X. XXXXXX
XXXXXXX & XXXXXX, LLC
By:
-----------------------------------------
Name:
Title:
XXXXXXX & XXXXXX VALUE PARTNERS, L.P.
By:
-----------------------------------------
Name:
Title:
--------------------------------------------
XXXXXX X. XXXXXX
--------------------------------------------
XXXXXX X. XXXXXXX, XX.
EXHIBIT B
May 27, 2004
BY HAND DELIVERY
Xxxxx Xxxxxxx
000 Xxxxx Xxxxxx (0X)
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
As we have discussed, your term as Chairman of the Board of Directors of
Boston Life Sciences, Inc. ("BLSI" or the "Company") will end upon the
adjournment of the Company's 2004 annual meeting of stockholders, and your
relationship with the Company as an independent contractor pursuant to Section
4(g) of the agreement between you and the Company captioned Restated Executive
Consulting and Director Agreement dated April 13, 2003 (the "Consulting and
Director Agreement") will terminate effective June 30, 2004 (the "Separation
Date"). The purpose of this letter is to confirm the agreement reached between
you and the Company (as generally reflected in a resolution passed by the
Company's Board of Directors on May 17, 2004) concerning your separation
arrangements, as follows:
1. CONSULTING FEES. You acknowledge that you have received pay for all
consulting work that you have performed or will perform for the Company through
the period ending June 30, 2004, to the extent not previously paid.
2. SEPARATION PAYMENTS AND BENEFITS. In consideration of your acceptance
of this Agreement and subject to your meeting in full your obligations under it
and under Section 6 and Section 7 of the Consulting and Director Agreement, and
in consideration of the fact that the Company does not intend to nominate you as
a director of the BLSI Board for either the 2004/2005 term or 2005/2006 term, as
it had originally agreed to do so in Section 3 of the Consulting and Director
Agreement, the Company will provide you the following separation payments and
benefits:
(a) Pursuant to Section 4(h) of the Consulting and Director
Agreement, the Company will pay you, no later than June 15, 2004, a lump sum of
one hundred and eighty-seven thousand five hundred dollar ($187,500), which
represents the balance of your consulting fee for the period of July 1, 2004
through December 31, 2005. This lump sum payment will be made to you no later
than June 15, 2004.
(b) In recognition of your (i) contribution to BLSI in the second
half of 2003, including the completion of an emergency financing, (ii)
assumption of additional responsibility not previously contemplated in the
Consulting and Director Agreement that you assumed in 2004, including (without
limitation) acting generally as an Executive Chairman, and (iii) the probable
loss of "milestone" payments that you may have prospectively earned under the
Consulting and Director Agreement, together with the loss of opportunity to earn
any director's fees and options or bonuses as a result of the Company's decision
not to nominate you as a director of the BLSI Board for either the 2004/2005
term or 2005/2006 term, the Company will pay you a lump sum of ninety thousand
dollars ($90,000). This lump sum payment will be made to you no later than June
15, 2004.
(c) In recognition of the fact that the Company's decision not to
nominate you for continued Board service has deprived you of a valuable right
and may also contribute to a diminution of your professional stature and
standing within the biotech and investment communities, the Company will grant
to you, on the effective date of this Agreement, an option to purchase, in whole
or in part, on the terms and subject to the conditions set forth in the
applicable stock option plan, a total of 200,000 shares of common stock of the
Company at the price of $1.00 per share (the "Options"). These Options must be
exercised by you within four years of the effective date of this Agreement.
These Options, together with all other option shares previously granted to you,
will be fully vested as of the effective date of this Agreement. Your rights and
obligations with respect to any stock options granted to you by the Company
which have vested as of the effective date of this Agreement shall be governed
by the applicable stock option plan and any agreements or other requirements
applicable to those options.
(d) Pursuant to Section 4(f) of the Consulting and Director
Agreement, if, on the effective date of this Agreement, you are enrolled in the
Company's group health and dental plans under the federal law known as COBRA,
then, until the earlier of (i) a period not to exceed twelve (12) months, or
(ii) the date on which you commence benefited employment elsewhere, the Company
will reimburse you the cost of any COBRA premiums paid by you to continue
coverage under the Company's group plan.
3. WITHHOLDING. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law and all other deductions authorized by you.
4. ACKNOWLEDGEMENT OF FULL PAYMENT. You acknowledge and agree that the
payments provided under paragraph 1 of this Agreement are in complete
satisfaction of any and all compensation due to you from the Company, whether
for services provided to the Company or otherwise, through the effective date of
the Agreement and that, except as expressly provided under this Agreement, no
further compensation is owed to you.
5. CONFIDENTIALITY AND NON-DISPARAGEMENT.
(a) You agree that you will continue to protect Confidential and
Proprietary Business Information, as set forth in Section 7(a)-(b) of the
Consulting and Director Agreement.
(b) You agree that you will not disclose this Agreement or any of
its terms or provisions, directly or by implication, except to members of your
immediate family and to your legal and tax advisors, and then only on condition
that they agree not to further disclose this Agreement or any of its terms or
provisions to others. You also agree that you will not disparage or criticize
the Company, its business, its management or its products, as well as any of the
subsidiaries or affiliates of the Company, and that you will not otherwise do or
say anything that could disrupt the good morale of Company employees or harm the
interests or reputation of the Company, its subsidiaries or affiliates.
6. RESTRICTIVE COVENANTS. You agree that you will continue to meet your
full obligations under Section 6 of the Consulting and Director Agreement.
7. INTELLECTUAL PROPERTY. You agree that you will continue to meet your
full obligations under Section 7(c) of the Consulting and Director Agreement.
8. RETURN OF COMPANY DOCUMENTS AND OTHER PROPERTY. In signing this
Agreement, you represent and warrant that you have returned to the Company any
and all documents, materials and information (whether in hardcopy, on electronic
media or otherwise) related to Company business (whether present or otherwise)
and all keys, access cards, credit cards, computer hardware and software,
telephones and telephone-related equipment and all other property of the Company
in your possession or control. Further, you represent and warrant that you have
not retained any copy of any Company documents, materials or information
(whether in hardcopy, on electronic media or otherwise). Recognizing that your
employment with the Company has ended, you agree that you will not, for any
purpose, attempt to access or use any Company computer or computer network or
system, including without limitation its electronic mail system. Further, you
acknowledge that you have disclosed to the Company all passwords necessary or
desirable to enable the Company to access all information which you have
password-protected on any of its computer equipment or on its computer network
or system.
9. EMPLOYEE COOPERATION. You agree to cooperate with the Company hereafter
with respect to all matters arising during or related to your employment,
including but not limited to all matters in connection with any governmental
investigation, litigation or regulatory or other proceeding which may have
arisen or which may arise following the signing of this Agreement. The Company
will reimburse your reasonable out-of-pocket expenses incurred in complying with
Company requests hereunder, provided such expenses are authorized by the Company
in advance.
10. RELEASE OF CLAIMS.
(a) In exchange for the special separation payments and benefits
provided you under this Agreement, to which you would not otherwise be entitled,
on your own behalf and that of your heirs, executors, administrators,
beneficiaries, personal representatives and assigns, you agree that this
Agreement shall be in complete and final settlement of any and all causes of
action, rights or claims, whether known or unknown, that you have had in the
past, now have, or might now have, in any way related to, connected with or
arising out of your position on BLSI's Board, your employment (as both an
employee and consultant for the Company) or its termination or pursuant to Title
VII of the Civil Rights Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the fair employment practices statutes of the
state or states in which you have provided services to the Company or any other
federal, state or local law, regulation or other requirement, and you hereby
release and forever discharge the Company and its subsidiaries and other
affiliates, and all of their respective past, present and future directors,
shareholders, officers, members, managers, general and limited partners,
employees, agents, representatives, successors and assigns, and all others
connected with any of them, both individually and in their official capacities,
from any and all such causes of action, rights or claims.
(b) This Agreement, including the release of claims set forth the
paragraph immediately above, creates legally binding obligations and the Company
therefore advises you to consult an attorney before signing this Agreement. In
signing this Agreement, you give the Company assurance that you have signed it
voluntarily and with a full understanding of its terms; that you have had
sufficient opportunity, before signing this Agreement, to consider its terms and
to consult with an attorney, if you wished to do so, or to consult with any
other of those persons to whom reference in made in the first sentence of
paragraph 5(b) above; and that, in signing this Agreement, you have not relied
on any promises or representations, express or implied, that are not set forth
expressly in this Agreement.
11. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between you and
the Company and supersedes all prior and contemporaneous communications,
agreements and understandings, whether written or oral, with respect to your
employment, its termination and all related matters, excluding only the
Consulting and Director Agreement, the Indemnity Agreement between you and the
Company dated March 26, 2004, and your obligations with respect to the
securities of the Company, all of which shall remain in full force and effect in
accordance with their terms.
(b) This Agreement may not be modified or amended, and no breach
shall be deemed to be waived, unless agreed to in writing by you and the Chief
Executive Officer of the Company or his expressly authorized designee. The
captions and headings in this Agreement are for convenience only and in no way
define or describe the scope or content of any provision of this Agreement.
(c) The obligation of the Company to make payments to you or on your
behalf under this Agreement is expressly conditioned upon your continued full
performance of your obligations under this Agreement, under the Consulting and
Director Agreement and the Indemnity Agreement between you and the Company dated
March 26, 2004.
If the terms of this Agreement are acceptable to you, please sign, date
and return it to me within twenty-one days of the date you receive it. You may
revoke this Agreement at any time during the seven-day period immediately
following the date of your signing. If you do not revoke it, then, at the
expiration of that seven-day period, this letter will take effect as a legally-
binding agreement between you and the Company on the basis set forth above. The
enclosed copy of this letter, which you should also sign and date, is for your
records.
Sincerely,
Boston Life Sciences, Inc.
By:
---------------------------------
Accepted and agreed:
Signature:
--------------------------------
Date:
-------------------------------------
EXHIBIT X-0
Xxxx 00, 0000
Xxxxxx Life Sciences, Inc.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the letter agreement from Boston Life Sciences,
Inc. ("BLSI") to me, dated May 27, 2004 (the "SEPARATION Agreement"), which I
signed and returned to BLSI on May 27, 2004. Terms defined in the Separation
Agreement and used herein have such defined meanings for purposes of this
letter. This will confirm our agreement as follows:
1. The Consulting and Director Agreement is terminated on the date
of this letter, except to the extent the Separation Agreement expressly requires
that I continue to perform any terms of the Consulting and Director Agreement.
2. The stock options referred to in Section 2(c) of the Separation
Agreement were granted to me on May 27, 2004, under the 1998 Omnibus Stock
Option Plan pursuant to the Separation Agreement and the grant letter attached
hereto as Schedule 1.
3. Of the options to purchase 1,457,230 shares of common stock of
BLSI previously granted to me, the options set forth below shall be cancelled
and no longer be exercisable upon the grant of the options under Section 2(c) of
the Separation Agreement:
Option Exercise Options
Grant Date Price Voided
----------------------------------
12/29/1995 7.8125 93,230
11/22/1996 6.5625 25,000
7/22/1997 4.4700 150,000
1/3/2000 3.6250 131,770
------------
400,000
============
The remaining previously-granted stock options are fully vested and are
exercisable in accordance with their terms.
4. If I revoke the Separation Agreement, I will give written notice
thereof to the Secretary of BLSI on or before June 10, 2004. Any such revocation
shall also revoke this letter. Upon any such revocation, all rights and benefits
provided under the Separation Agreement and this letter shall be rescinded.
5. To the extent this letter is inconsistent with any provision of
the Separation Agreement, this letter shall govern. Nothing in this letter or
the Separation Agreement shall limit my rights under the Indemnity Agreement
dated as of March 26, 2004 between myself and the Company.
Very truly yours,
-------------------------------------------
S. Xxxxx Xxxxxxx
AGREED
Boston Life Sciences, Inc.
By:
------------------------------
Name:
Title:
SCHEDULE 1 - GRANT LETTER
BOSTON LIFE SCIENCES, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement certifies that the Board of Directors has granted an
Option to purchase shares of Common Stock of Boston Life Sciences, Inc. as
stated below. Capitalized terms used herein and not defined shall have the
meanings ascribed to such terms in the formal plan documents (the "Plan") under
which this Option is being issued.
Name of Optionee: Xx. Xxxxx Xxxxxxx
Address: 000 Xxxxx Xxxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Social Security No.: ###-##-####
Number of Shares: 200,000 shares
Exercise Price of Option: $1.00 per share
Date of Grant: May 27, 2004
Option Expiration Date: May 27, 2008
Vesting Schedule: 100% as of May 27, 2004
The Option is subject to all of the terms and conditions of the Plan and to any
additional terms specified by the Board of Directors or a Committee of the Board
of Directors, including, without limitation, that the options granted hereby
shall be granted to you as provided in, and shall be subject to, the Separation
Agreement between you and the Company pursuant to which these options are being
granted to you.
------------------------- -----------------------------
Xxxx X. Xxxxxx Xxxxxx Xxxxxx
President Chief Financial Officer
EXHIBIT C
AGREEMENT
AGREEMENT made and entered into in Boston, Massachusetts, by and between
Boston Life Sciences, Inc. (the "Company"), a Delaware corporation with its
principal place of business in Boston, Massachusetts, and Xxxx X. Xxxxxx, M.D.,
of Fayston, Vermont (the "Executive"), effective as of the 10th day of June
2004.
WHEREAS, the operations of the Company and its Affiliates are a complex
matter requiring direction and leadership in a variety of arenas, including
financial, scientific, clinical trials, strategic planning, regulatory,
community relations and others;
WHEREAS, the Executive is possessed of certain experience and expertise
that qualify him to provide the direction and leadership required by the Company
and its Affiliates; and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company therefore wishes to continue to employ the Executive as its President
and Chief Operating Officer and the Executive wishes to continue such
employment;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts continued
employment.
2. TERM.
(a) Subject to earlier termination as hereafter provided, the
Executive's employment hereunder shall be for a term of one (1) year, commencing
on the effective date hereof, and may be extended or renewed for successive one
year terms only by a written agreement signed by the Executive and an expressly
authorized representative of the Company. The term of this Agreement, as from
time to time extended or renewed, is hereafter referred to as "the term of this
Agreement" or "the term hereof."
(b) PLACE OF PERFORMANCE. The Executive shall be based primarily out
of the Company's Boston, Massachusetts office. However, the Executive shall be
entitled to work one business day per week out of his home office in Vermont.
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve the Company as
its President and Chief Operating Officer, or in such other executive position
as the Board or the Chief Executive Officer (if any) may designate from time to
time. In addition, and without further compensation, the Executive shall serve
as a director of the Company if he is nominated to stand for election by the
Board of Directors of the Company. In addition, the Executive shall serve as a
director and/or officer of one or more of the Company's Affiliates if so elected
or appointed from time to time. The Executive shall report to, and shall be
subject to the supervision of, the Chief Executive Officer (or if there is none,
the Board of Directors).
(b) During the term hereof, the Executive shall be employed by the
Company on a full-time basis and shall perform such duties and responsibilities
on behalf of the Company and its Affiliates as may be designated from time to
time by the Board or by its designees or by the Chief Executive Officer (if
any).
(c) During the term hereof, the Executive shall devote his full
business time and his best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the Company and
its Affiliates and to the discharge of his duties and responsibilities
hereunder. The Executive shall not engage in any other business activity or
serve in any industry, trade, professional, governmental or academic position
during the term of this Agreement, except as may be expressly approved in
advance by the Board in writing. Notwithstanding anything in this Agreement to
the contrary, the Executive's continued involvement as Chairman of the Board of
FlouroPharma, Inc. will not constitute a violation of this Section 3(c),
provided that FlouroPharma, Inc. does not compete with any products or services
the Company or any of its Affiliates is developing or plans to develop and the
Executive limits the expenditure of his time on FlouroPharma, Inc. matters so as
not to interfere with the conduct of his duties and responsibilities at the
Company.
4. COMPENSATION AND BENEFITS. As compensation for all services performed
by the Executive during the term hereof and subject to performance of the
Executive's duties and of the obligations of the Executive to the Company and
its Affiliates, pursuant to this Agreement or otherwise:
(a) BASE SALARY. During the term hereof, the Company shall pay the
Executive a base salary at the rate of Three Hundred and Eight Thousand Dollars
($308,000) per annum, subject to adjustment to reflect any increase in base
salary that may be approved by the Board of Directors in its sole discretion,
payable in accordance with the regular payroll practices of the Company for its
executives. Such base salary, subject to such adjustments, is hereafter referred
to as the "Base Salary".
(b) INCENTIVE AND BONUS COMPENSATION. Executive shall be eligible to
be considered for a bonus annually during the term hereof. The amount of such
bonus, if any, shall be determined by the Board's Compensation Committee in its
sole discretion.
(c) VACATIONS. During the term hereof, the Executive shall be
entitled to four (4) weeks of vacation per year, to be taken at such times and
intervals as shall be determined by the Executive, subject to the reasonable
business needs of the Company. Vacation shall otherwise be governed by the
policies of the Company, as in effect from time to time.
(d) OTHER BENEFITS. During the term hereof and subject to any
contribution therefor generally required of employees of the Company, the
Executive shall be entitled to participate in any and all employee benefit plans
from time to time in effect for employees of the Company generally, except to
the extent such plans are in a category of a benefit otherwise provided to the
Executive (E.G., severance pay). Such participation shall be subject to the
terms of the applicable plan documents and generally applicable Company
policies. The Company may alter, modify, add to or delete its employee benefit
plans at any time as it, in its sole judgment, determines to be appropriate,
without recourse by the Executive.
(e) BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive for all reasonable, customary and necessary business expenses incurred
or paid by the Executive in the performance of his duties and responsibilities
hereunder, subject to any maximum annual limit and other restrictions on such
expenses set by the Board or the Chief Executive Officer (if any) and to such
reasonable substantiation and documentation as may be specified by the Company
from time to time.
(f) OTHER POLICIES, ETC. Except as expressly set forth in this
Agreement, the Executive shall be subject to all laws, rules, regulations and
policies as are from time to time applicable to employees of the Company.
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS. Notwithstanding the
provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate prior to the expiration of the term under the following circumstances:
(a) DEATH. In the event of the Executive's death during the term
hereof, the Executive's employment hereunder shall immediately and automatically
terminate. In such event, the Company shall pay to the Executive's designated
beneficiary or, if no beneficiary has been designated by the Executive, to his
estate, (i) the Base Salary earned but not paid through the date of termination,
(ii) pay for any vacation time earned but not used through the date of
termination, (iii) any bonus compensation awarded but unpaid on the date of
termination and (iv) any business expenses incurred by the Executive but
un-reimbursed on the date of termination, provided that such expenses and
required substantiation and documentation are submitted within thirty (30) days
of termination and that such expenses are reimbursable under Company policy (all
of the foregoing, "Final Compensation"). The Company shall have no further
obligation to the Executive hereunder.
(b) DISABILITY.
(i) The Company may terminate the Executive's employment
hereunder, upon notice to the Executive, in the event that the Executive
becomes disabled during his employment hereunder through any illness,
injury, accident or condition of either a physical or psychological nature
and, as a result, is unable to perform substantially all of his duties and
responsibilities hereunder, with or without reasonable accommodation, for
ninety (90) days during any period three hundred and sixty-five (365)
consecutive calendar days. In the event of such termination, the Company
shall have no further obligation to the Executive, other than for payment
of Final Compensation.
(ii) The Board may designate another employee to act in the
Executive's place during any period of the Executive's disability.
Notwithstanding any such designation, the Executive shall continue to
receive the Base Salary in accordance with Section 4(a) and benefits in
accordance with Section 4(d), to the extent permitted by the terms of the
applicable benefit plans as in effect at the time of such disability,
until the Executive becomes eligible for disability income benefits under
the Company's disability income plan or until the termination of his
employment, whichever shall first occur.
(iii) While receiving disability income payments under the
Company's disability income plan, the Executive shall not be entitled to
receive any Base Salary under Section 4(a) hereof, but shall continue to
participate in Company benefit plans in accordance with Section 4(d) to
the extent permitted by the terms of the applicable benefit plans as in
effect at the time of such disability, until the termination of his
employment.
(iv) If any question shall arise as to whether during any
period the Executive is disabled through any illness, injury, accident or
condition of either a physical or psychological nature so as to be unable
to perform substantially all of his duties and responsibilities hereunder,
the Executive may, and at the request of the Company shall, submit to a
medical examination by a physician selected by the Company to whom the
Executive or his duly appointed guardian, if any, has no reasonable
objection to determine whether the Executive is so disabled, and such
determination shall for the purposes of this Agreement be conclusive of
the issue. If such question shall arise and the Executive shall fail to
submit to such medical examination, the Company's determination of the
issue shall be binding on the Executive.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment hereunder for Cause (as hereafter defined) by giving the
Executive written notice thereof. The following, as determined by the Board in
its reasonable judgment, shall constitute "Cause" for termination:
(i) The Executive's willful failure to perform (other than by
reason of disability), willful misconduct or gross negligence in the
performance of, his duties and responsibilities, which failure, misconduct
or neglect, if susceptible to cure, remains uncured or continues to recur
for fourteen (14) days after notice from the Company specifying in
reasonable detail the nature of such failure, misconduct or neglect;
(ii) Material breach by the Executive of any provision of this
Agreement or any other agreement with the Company or any of its
Affiliates, which such breach remains uncured for fourteen (14) days after
notice from the Company specifying in reasonable detail the nature of such
breach; or
(iii) Commission of a felony or other crime involving fraud,
moral turpitude or a violation of federal or state securities laws.
Upon the giving of notice of termination of the Executive's employment hereunder
for Cause, the Company shall have no further obligation to the Executive, other
than for Final Compensation.
(d) BY THE COMPANY OTHER THAN FOR CAUSE. The Company, based on the
determination of the Chief Executive Officer or the Board of Directors, may
terminate the Executive's employment hereunder other than for Cause at any time
upon notice to the Executive. In the event of such termination, in addition to
Final Compensation and provided that no benefits are payable to the Executive
under a separate severance agreement or an executive severance plan as a result
of such termination, then until the conclusion of nine (9) months following the
date of termination, the Company shall continue to pay the Executive the Base
Salary at the rate in effect on the date of termination. Any obligation of the
Company to the Executive hereunder is conditioned, however, upon the Executive
signing a release of claims in the form provided by the Company (the "Employee
Release") within twenty-one days (or such greater period as the Company may
specify) following the later of the date on which the Executive receives notice
of termination of employment or the date the Executive receives a copy of the
Employee Release and upon the Executive not revoking the Employee Release in a
timely manner thereafter. Base Salary to which the Executive is entitled
hereunder shall be payable in accordance with the normal payroll practices of
the Company and will begin at the Company's next regular payroll period which is
at least five business days following the effective date of the Employee
Release, but shall be retroactive to next business day following the date of
termination.
(e) BY THE EXECUTIVE. The Executive may terminate his employment
hereunder at any time and for any reason (or no reason) upon 30 (thirty) days'
notice to the Company, unless such termination would violate any obligation of
the Executive to the Company under a separate severance agreement. In the event
of termination of the Executive pursuant to this Section 5(e), the Board may
elect to waive the period of notice, or any portion thereof, and the Company
will pay the Executive the amounts he would have received had his employment
been terminated pursuant to Section 5(d) at the times and subject to the
conditions set forth in Section 5(d).
(f) POST-AGREEMENT EMPLOYMENT. In the event the Executive remains in
the employ of the Company or any of its Affiliates following termination of this
Agreement, by the expiration of the term or otherwise, then such employment
shall be at-will.
6. EFFECT OF TERMINATION. The provisions of this Section 6 shall apply to
termination due to the expiration of the term hereof, pursuant to Section 5 or
otherwise:
(a) Payment by the Company of any amounts that may be due the
Executive under the applicable termination provision of Section 5 shall
constitute the entire obligation of the Company to the Executive.
(b) Benefits shall terminate pursuant to the terms of the applicable
benefit plans based on the date of termination of the Executive's employment
without regard to any continuation of Base Salary or other payment to the
Executive following such date of termination.
(c) Provisions of this Agreement shall survive any termination if so
provided herein or if necessary or desirable to accomplish the purposes of other
surviving provisions, including without limitation the obligations of the
Executive under Sections 7, 8 and 9 hereof. The obligation of the Company to
make payments to or on behalf of the Executive under Section 5 (d) and (e)
hereof is expressly conditioned upon the Executive's continued full performance
of his obligations under Sections 7, 8 and 9 hereof. The Executive recognizes
that, except as expressly provided in Section 5 (d) and (e) hereof, no
compensation is earned after termination of employment.
7. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company and its Affiliates
continually develop Confidential Information, that the Executive may develop
Confidential Information for the Company or its Affiliates, and that the
Executive may learn of Confidential Information during the course of employment.
The Executive will comply with the policies and procedures of the Company and
its Affiliates for protecting Confidential Information and shall not disclose to
any Person or use, other than as required by applicable law or for the proper
performance of his duties and responsibilities to the Company and its
Affiliates, any Confidential Information obtained by the Executive incident to
his employment or other association with the Company or any of its Affiliates.
The Executive understands that this restriction shall continue to apply after
his employment terminates, regardless of the reason for such termination.
(b) All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or
its Affiliates and any copies, in whole or in part, thereof (the "Documents"),
whether or not prepared by the Executive, shall be the sole and exclusive
property of the Company and its Affiliates. The Executive shall safeguard all
Documents and shall surrender to the Company at the time his employment
terminates, or at such earlier time or times as the Board or its designee may
specify, all Documents then in the Executive's possession or control.
8. ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY.
(a) The Executive shall promptly and fully disclose all Intellectual
Property to the Company. The Executive hereby assigns and agrees in the future
to assign to the Company (or as otherwise directed by the Company) the
Executive's full right, title and interest in and to all Intellectual Property.
The Executive agrees to provide, at the Company's request, all further
cooperation which the Company determines is necessary or desirable to accomplish
the complete transfer of the Intellectual Property and all associated rights to
the Company, its successors, assigns and nominees, and to assure the Company the
full enjoyment of the Intellectual Property, including without limitation
executing further applications both domestic and foreign, specifications, oaths,
assignments, consents, releases, government communications and other
commercially reasonable documentation, responding to corporate diligence
inquiries, and providing good faith testimony by affidavit, declaration,
deposition, in-person or other proper means, in support of any effort by the
Company to establish, perfect, defend, or otherwise enjoy, in this or any
foreign country, its rights acquired pursuant to this Agreement through
prosecution of governmental filings, regulatory proceedings, litigation or other
means.
(b) To the extent the Executive cannot transfer and assign his
entire right, title, and interest to the Intellectual Property, or any portion
thereof, then the Executive will assign and transfer all right, title, and
interest in and to the Intellectual Property to the Company at the first
opportunity to do so. To the extent that the Executive cannot assign and
transfer any of his full right, title, and interest in the Intellectual Property
then the Executive hereby grants the Company and its Affiliates an irrevocable,
worldwide, fully paid-up, royalty-free, exclusive license, with the right to
sublicense through multiple tiers, to make, use, sell, improve, reproduce,
distribute, perform, display, transmit, manipulate in any manner, create
derivative works based upon, and otherwise exploit or utilize in any manner the
Intellectual Property. If the Company is unable because of the Executive's
mental or physical incapacity or for any other reason to secure the Executive's
signature for any of the assignments, licenses, or other reasonably requested
documents pertaining to the Intellectual Property referenced in the foregoing
Section 8(a)-(b) hereof within ten business (10) days of delivery of said
documents to the Executive, then the Executive will hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents as his agent
and attorney in fact, to act for and in his behalf and stead to execute and file
said documents and to do all other lawfully permitted acts to further the
perfection, defense, and enjoyment of the Company's rights relating to the
Intellectual Property with the same legal force and effect as if executed by the
Executive. The Executive stipulates and agrees that such appointment is a right
coupled with an interest and will survive his incapacity or unavailability at
any future time.
(c) The Executive further agrees that he will assign, deliver and
communicate to the Company and its Affiliates, their representatives or agents
or their successors and assigns, any know-how, facts and materials arising from
or relating to said Intellectual Property including without limitation: (i) all
simulations, prototypes, and other embodiments of the Intellectual Property;
(ii) all drawings, blueprints, calculations, research plans and results, lab
notes, workbooks and other records and written materials that relate to the
Intellectual Property or that embody or record any know-how pertaining to the
Intellectual Property; (iii) all files, documents and communications pertaining
to the Intellectual Property; and (iv) evidence for patent interference purposes
or for other legal proceedings whenever requested. The Executive will not charge
the Company or any of its Affiliates, successors, or assigns for time spent in
complying with these obligations under Section 8(a)-(c) of this Agreement.
(d) The Executive hereby represents and warrants that all of the
product resulting from his work for the Company will be original and will not
infringe the rights of any third party, including without limitation
intellectual property rights, such as rights pertaining to patents, trademarks,
copyrights and trade secrets.
(e) The Executive agrees that he will not, and will not permit
anyone acting on his behalf to, assert against the Company, its Affiliates or
any of their respective directors, shareholders, officers, managers, members,
general or limited partners, joint venturers, employees, representatives or
agents (collectively, with the Company and its Affiliates, the "Corporate
Group") any cause of action, right or claim, of any kind or nature, with respect
to the Intellectual Property or any Employee Inventions, including without
limitation Employee Inventions incorporated into the Intellectual Property, and
the Executive agrees to indemnify and hold harmless the Corporate Group, and
each of them, from any and all causes of action, rights or claims, of any kind
or nature, losses and damages and costs and expenses, including without
limitation attorneys' fees, and any and all other liabilities incurred by any of
the Corporate Group arising from or relating to proprietary rights in the
Employee Inventions, or any of them, or resulting from the Executive's failure
to meet any of his obligations under any of Section 8(a)-(e) of this Agreement.
9. RESTRICTED ACTIVITIES. The Executive agrees that some restrictions on
his activities during and after his employment are necessary to protect the good
will, Confidential Information and other legitimate interests of the Company and
its Affiliates:
(a) While the Executive is employed by the Company and for two years
after his employment terminates (in the aggregate, the "Non-Competition
Period"), the Executive shall not, directly or indirectly, whether as owner,
partner, investor, consultant, agent, employee, co-venturer or otherwise,
compete with the business of the Company or any of its Affiliates worldwide or
undertake any planning for any business competitive with the business of the
Company or any of its Affiliates. Specifically, but without limiting the
foregoing, the Executive agrees not to engage in any manner in any activity that
is directly or indirectly competitive or potentially competitive with the
business of the Company or any of its Affiliates as conducted or under
consideration at any time during the Executive's employment. Restricted activity
includes without limitation accepting employment or a consulting position with
any Person who is, or at any time within twelve (12) months prior to termination
of the Executive's employment has been, a customer of the Company or any of its
Affiliates. For the purposes of this Section 9, the business of the Company and
its Affiliates shall include the development, marketing or sale of any or all
Products.
(b) The Executive agrees that, during his employment with the
Company, he will not undertake any outside activity, whether or not competitive
with the business of the Company or its Affiliates, that could reasonably give
rise to a conflict of interest or otherwise interfere with his duties and
obligations to the Company or any of its Affiliates.
(c) The Executive further agrees that while he is employed by the
Company and during the Non-Competition Period, the Executive will not solicit or
encourage any employee of the Company or any of its Affiliates to terminate his
or her relationship with the Company or any of its Affiliates, or solicit or
encourage any customer or vendor of the Company or any of its Affiliates to
terminate or diminish its relationship with them, or, in the case of a customer,
to conduct with any Person any business or activity which such customer conducts
or could conduct with the Company or any of its Affiliates.
(d) Without limiting the generality of Section 9(a)-(c) above, the
Executive may continue his involvement with FlouroPharma, Inc. provided that
FlouroPharma, Inc. does not during the Non-Competition period directly or
indirectly compete with the business of the Company or any of its Affiliates or
undertake any planning for any business competitive with the business of the
Company or any of its Affiliates.
(e) The Company acknowledges that this Section 9 constitutes a
non-compete agreement that satisfies the requirements of Section 6(b)(iv)(b) of
Boston Life Sciences, Inc.'s 1998 Omnibus Stock Option Plan or any similar
provision found in another Company stock option plan under which the Executive
was granted options.
10. NOTIFICATION REQUIREMENT. Until ninety (90) days after the conclusion
of the Non-Competition Period, the Executive shall give notice to the Company of
each new business activity he plans to undertake, at least 10 (ten) days prior
to beginning any such activity. Such notice shall state the name and address of
the Person for whom such activity is undertaken and the nature of the
Executive's business relationship(s) and position(s) with such Person. The
Executive shall provide the Company with such other pertinent information
concerning such business activity as the Company may reasonably request in order
to determine the Executive's continued compliance with his obligations under
Sections 7, 8 and 9 hereof.
11. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7, 8 and 9
hereof. The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Affiliates and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Executive further acknowledges that,
were he to breach any of the covenants contained in Sections 7, 8 and 9 hereof,
the damage to the Company would be irreparable. The Executive therefore agrees
that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by the Executive of any of said covenants, without having to
post bond, and shall be further entitled to recover any attorney's fees incurred
in enforcing its rights under Section 7, 8 and 9 hereof. The parties further
agree that, in the event that any provision of Section 7, 8 and 9 hereof shall
be determined by any court of competent jurisdiction to be unenforceable by
reason of its being extended over too great a time, too large a geographic area
or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.
12. CONFLICTING AGREEMENTS. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound, and that the Executive is not now subject
to any covenants against competition or similar covenants or any court order or
other legal obligation that would affect the performance of his obligations
hereunder. The Executive will not disclose to or use on behalf of the Company
any proprietary information of a third party without such party's consent.
13. DEFINITIONS. Words or phrases which are initially capitalized or are
within quotation marks shall have the meanings provided in this Section and as
provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
(a) "Affiliates" means all persons and entities directly or
indirectly controlling, controlled by or under common control with the Company,
where control may be by either management authority or equity interest.
(b) "Confidential Information" means any and all information of the
Company and its Affiliates that is not generally known by others with whom they
compete or do business, or with whom any of them plans to compete or do business
and any and all information, publicly known in whole or in part or not, which,
if disclosed by the Company or its Affiliates would assist in competition
against them. Confidential Information includes without limitation such
information relating to (i) the development, research, testing, manufacturing,
marketing and financial activities of the Company and its Affiliates; (ii) the
Products; (iii) the costs, sources of supply, financial performance and
strategic plans of the Company and its Affiliates; (iv) the identity and special
needs of the customers of the Company and its Affiliates; (v) the Company's
intellectual property, including all of the inventions, discoveries,
developments, methods, processes, compositions, works, concepts and ideas
(whether or not patentable or copyrightable or constituting trade secrets) owned
or licensed by the Company; (vi) the results or other data pertaining to
pre-clinical and clinical trials; and (vii) the people and organizations with
whom the Company and its Affiliates have business relationships and those
relationships. Confidential Information also includes any information that the
Company or any of its Affiliates have received, or may receive hereafter,
belonging to customers or others with any understanding, express or implied,
that the information would not be disclosed.
(c) "Intellectual Property" means inventions, discoveries,
developments, methods, processes, compositions, works, concepts and ideas
(whether or not patentable or copyrightable or constituting trade secrets)
conceived, made, created, developed or reduced to practice by the Executive
(whether alone or with others, whether or not during normal business hours or on
or off Company premises) during the Executive's employment and during the period
of six (6) months immediately following termination of his/her employment that
relate to either the Products or any prospective activity of the Company or any
of its Affiliates or that make use of Confidential Information or any of the
equipment or facilities of the Company or any of its Affiliates.
(d) "Person" means an individual, a corporation, a limited liability
company, an association, a partnership, an estate, a trust and any other entity
or organization, other than the Company or any of its Affiliates.
(e) "Products" mean all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or put
into use by the Company or any of its Affiliates, together with all services
provided or planned by the Company or any of its Affiliates, during the
Executive's employment, including but not limited to the principal drug
candidates currently under development by the Company, Altropane, Troponin, and
Inosine.
14. WITHHOLDING. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.
15. ASSIGNMENT. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other. Provided, however,
the Company may assign its rights and obligations under this Agreement without
the consent of the Executive in the event that the Executive is transferred to a
position with any of the Affiliates or in the event that the Company shall
hereafter effect a reorganization, consolidate with, or merge into, any Person
or transfer all or substantially all of its properties or assets to any Person.
This Agreement shall inure to the benefit of and be binding upon the Company and
the Executive, their respective successors, executors, administrators, heirs and
permitted assigns.
16. SEVERABILITY. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
17. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
18. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at its principal place of business, attention of the Chair of the Board, or to
such other address as either party may specify by notice to the other actually
received.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment, except the Executive's rights and obligations and those
of the Company with respect to the Company's securities and the Indemnity
Agreement dated as of March 26, 2004 between the Company and the Executive.
20. AMENDMENT. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by an expressly authorized representative
of the Company.
21. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
22. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
23. GOVERNING LAW. This is a Massachusetts contract and shall be construed
and enforced under and be governed in all respects by the laws of the
Commonwealth of Massachusetts, without regard to the conflict of laws principles
thereof.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Executive, as of the date first above written.
THE EXECUTIVE: THE COMPANY
By:
------------------------------------ -----------------------------------
Xxxx X. Xxxxxx, M.D.
Title:
--------------------------------
EXHIBIT D
FOR IMMEDIATE RELEASE
BOSTON LIFE SCIENCES REACHES A SETTLEMENT
AGREEMENT WITH XXXXXXX & XXXXXX
XXXX 16, 0000-XXXXXX, XX - Boston Life Sciences, Inc. (NASDAQ: BLSI)
announced today that it has entered into a settlement and standstill
agreement with Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xx., Xxxxxxx & Xxxxxx,
LLC and Xxxxxxx & Xxxxxx Value Partners, L.P. (the "Investor Group"). The
execution of the settlement and standstill agreement enables the company to
focus on advancing its important drug development programs without incurring
the considerable expense and disruption of a threatened proxy contest at the
upcoming 2004 annual meeting of shareholders.
Under the terms of the settlement, the Company fixed the size of its Board of
Directors at five members, which now consists of Xxxx X. Xxxxxx, Xxxxxx Xxxxxx,
Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx. S. Xxxxx Xxxxxxx has
retired as Chairman of the Board and as a director of the Company. In order to
facilitate the settlement, and provide for the election of two new directors,
Xxxxx X. Xxxx and E. Xxxxxxxxxxx Xxxxxx have resigned from the Board as
independent directors. The terms of the settlement contemplate that upon the
hiring of a new Chief Executive Officer, the size of the Board of Directors
shall be increased to seven members and the new Chief Executive Officer and an
independent director nominated by the Chief Executive Officer and reasonably
acceptable to the Board shall be elected to the Board of Directors. The Company
will obtain a termination and discharge of the security interest on its property
securing its 10% Convertible Senior Secured Promissory Notes held by Xxxxxxx &
Xxxxxx Value Partners, L.P. by providing a letter of credit to collateralize the
Notes.
Xxxx X. Xxxxxx, the Company's President, said "We are pleased to be able to
resolve this matter and remove the uncertainty created by the threatened proxy
contest. We feel that this settlement is in the best interest of our
shareholders and will enable us to more effectively recruit a new Chief
Executive Officer. We extend our gratitude to Xxxxx Xxxxxxx upon his retirement
for his many years of service and leadership. We also extend our appreciation to
Xxxxx Xxxx and Xxxxxxxxxxx Xxxxxx for their long and valued service as
independent directors and for their willingness to step down from the Company's
Board in order to enable the parties to resolve the proxy contest on an amicable
and mutually agreeable basis. We look forward to working in collaboration with
our Board of Directors to advance our important drug development programs and to
maximize shareholder value."
Xxxxxx X. Xxxxxx, Senior Director of Xxxxxxx & Xxxxxx, LLC, said "I am pleased
to be part of a new Board of Directors and believe that the new structure places
the Company in a good position to achieve its goals."
Dr. Xxxxxx Xxxxxx, speaking on behalf of the Board, said, "With this issue
behind us, we look forward to refocusing the Board's and management's efforts on
developing the exciting scientific potential of the Company."
Boston Life Sciences, Inc. (BLSI) is a development stage biotechnology company
engaged in the research and development of novel therapeutic and diagnostic
solutions for central nervous system diseases (CNS) and cancer. In addition to
ALTROPANE, BLSI's products in development include: FLUORATECTM, a radioimaging
agent for the diagnosis of PD and ADHD; Inosine and AF-1, nerve growth factors
for the treatment of acute and chronic CNS disorders; Troponin I, a
naturally-occurring anti-angiogenesis factor for the treatment of solid tumors;
and novel therapies for the treatment of PD and ADHD.
STATEMENTS MADE IN THIS PRESS RELEASE OTHER THAN STATEMENTS OF HISTORICAL FACT
REPRESENT FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS INCLUDE, WITHOUT
LIMITATION, STATEMENTS REGARDING EXPECTATIONS OR BELIEFS AS TO FUTURE RESULTS OR
EVENTS, SUCH AS THE EXPECTED TIMING AND RESULTS OF CLINICAL TRIALS, DISCUSSIONS
WITH REGULATORY AGENCIES, SCHEDULES OF IND, NDA AND ALL OTHER REGULATORY
SUBMISSIONS, THE TIMING OF PRODUCT INTRODUCTIONS, THE POSSIBLE APPROVAL OF
PRODUCTS (INCLUDING THE ULTIMATE APPROVABILITY OF ALTROPANE), AND THE MARKET
SIZE AND POSSIBLE ADVANTAGES OF THE COMPANY'S PRODUCTS. ALL SUCH FORWARD-LOOKING
STATEMENTS INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS MAY
VARY MATERIALLY FROM THESE STATEMENTS. FACTORS THAT MAY AFFECT FUTURE RESULTS
INCLUDE: THE AVAILABILITY AND ADEQUACY OF FINANCIAL RESOURCES, DELAYS IN THE
REGULATORY OR DEVELOPMENT PROCESSES, RESULTS FROM CLINICAL AND PRE-CLINICAL
TRIALS, REGULATORY DECISIONS (INCLUDING THE FDA'S DISCRETION FOLLOWING
COMPLETION OF THIS SINGLE, PIVOTAL PHASE III TRIAL TO REQUIRE THE COMPANY TO
CONDUCT ADDITIONAL CLINICAL TRIALS IN ORDER TO ACHIEVE APPROVABILITY OF
ALTROPANE), MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS, THE ABILITY TO OBTAIN
INTELLECTUAL PROPERTY PROTECTION, THE OUTCOME OF DISCUSSIONS WITH POTENTIAL
PARTNERS AND OTHER POSSIBLE RISKS AND UNCERTAINTIES THAT HAVE BEEN NOTED IN
REPORTS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION,
INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 10-K.
For further information, please contact:
CORPORATE:
XXXXXX XXXXXX
CHIEF FINANCIAL OFFICER
BOSTON LIFE SCIENCES, INC.
617.425.0200
EMAIL: XXXXXXX@XXXXXXXXXXXXXXXXXX.XXX
SCHEDULE 1 TO SETTLEMENT AND STANDSTILL AGREEMENT
Number of
Option Options Exercise
Name Grant Date Granted Price
--------------------------------------------------------------------------------
Xxxx, Xxxxx 3/10/2004 180,000 $1.27
Xxxxxx, J. 1/5/2004 100,000 $1.29
Xxxxxxx, D. 3/10/2004 195,000 $1.27
Xxxxxxx, D. 5/27/2004 200,000 $1.00
Xxxxxx, R. 3/10/2004 50,000 $1.27
Xxxxxx, M. 1/5/2004 200,000 $1.29
Xxxxxx, C. 3/10/2004 65,000 $1.27
Xxxx 3/10/2004 50,000 $1.27
