Exhibit 99.1
FORM OF SUBSCRIPTION AGREEMENT
Boston Life Sciences, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
1. Subscription.
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(a) The undersigned ("Subscriber"), intending to be
legally bound, hereby irrevocably subscribes to purchase from Boston Life
Sciences, Inc., a Delaware corporation (the "Company") the aggregate dollar
amount of units (the "Units") set forth on the signature page hereof. Each Unit
consists of four shares of common stock (the "Common Stock"), $.01 par value
(each a "Share" and collectively the "Shares"), and a warrant to purchase one
share of Common Stock (each a "Warrant" and collectively the "Warrants"). The
offering price for each Share will be $2.15 (the "Offering Price"). The per
share exercise price for each Warrant will be the greater of (i) $2.75 per
share and (ii) (a) the closing bid price for the Common Stock as reported by
Nasdaq on the trading day preceding the closing (each closing, a "Closing"),
plus (b) $.01. The minimum investment is for $100,000, subject to the
discretion of the Company and the Placement Agent to accept lesser amounts. The
Company will not accept subscriptions for any fractional Units, such that the
maximum number of Units to be purchased by the Subscriber will be equal to the
maximum number of full Units purchasable at the Offering Price for the
aggregate dollar amount subscribed for on the signature page hereof. This
subscription is submitted to you in accordance with and subject to the terms
and conditions described in this agreement (the "Subscription Agreement") and
the Confidential Private Placement Memorandum, dated January 16, 2002,
including exhibits and appendices thereto and any documents and information
incorporated therein by reference, as it may be supplemented and amended (the
"Memorandum"), relating to an offering (the "Offering") of a maximum of
1,000,000 Units (the "Maximum Offering").
(b) (1) Subscription payments should be made by wire
transfer as follows:
Bank: Chase Manhattan Bank
Account: Continental Stock Transfer & Trust Company aaf
Boston Life Sciences, Inc. 2002
Account #: 530-053764
ABA#: 000000000
(2) Each Subscriber should also deliver the following to Boston
Life Sciences, Inc., 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxxxx, Chief Financial Officer: (i) two executed and
properly completed copies of this Subscription Agreement, (ii) two executed
copies of the registration rights agreement between the Company, the Subscriber
and the other parties thereto in the form provided herewith (the "Registration
Rights Agreement"), and (iii) two executed copies of the confidentiality
agreement between the Company and the Subscriber (the "Confidentiality
Agreement").
The proceeds of the Offering will be held in an escrow account by
Continental Stock. Transfer & Trust Company, as escrow agent (the "Escrow
Agent"), until subscriptions are received and accepted by the Company. The
Company may elect to hold an initial Closing (the "Initial Closing") at such
time as subscriptions are received and accepted by the Company for the minimum
offering of 350,000 Units (the "Minimum Offering"). The Offering will continue
until the soonest to occur of (i) subscriptions for the Maximum Offering are
accepted by the Company, (ii) the Company elects, in its sole discretion, to
terminate the Offering, or (iii) March 15, 2002, provided that the Offering may
continue past March 15, 2002 if extended by the mutual consent of the Company
and the Placement Agent (as defined below) without notice to investors. The
date that the Offering terminates is hereinafter referred to as the
"Termination Date." Upon a Closing, the Escrow Agent will distribute the
proceeds from the sale of the Units to the Company. The Offering Price for any
initial Closing will be the Offering Price for all subsequent Closings, if any.
Applicable investor funds will be returned, without interest or deduction, if
and to the extent a subscription is not accepted by the Company (including any
amount by which a Subscriber's subscription payments exceed the aggregate
Offering Price for the number of full Units for which such Subscriber's
subscription was accepted by the Company), or if a Closing with respect to such
funds does not occur at or prior to the Termination Date, as the same may be
extended.
(c) If this subscription is accepted by the Company, in
whole or in part, and subject to the conditions set forth in Section 2 of this
Subscription Agreement, the Company shall deliver to the undersigned a
certificate representing the Shares and an originally executed copy of the
Warrant subscribed for hereby, in each case to the extent so accepted, dated
the date of the applicable Closing, and a fully executed copy of this
Subscription Agreement, the Registration Rights Agreement and the
Confidentiality Agreement.
(d) The Company has retained Brimberg & Co. L.P.
("Brimberg" or the "Placement Agent") to act as lead placement agent for the
Offering on a best efforts basis. For those clients of Brimberg who purchase
Units in the Offering, up to an aggregate of $7 million, Brimberg will receive
(a) a cash fee equal to 7% of the gross proceeds (excluding exercise price) to
the Company resulting from the sale of the Units to its clients (the "Brimberg
Fee"), (b) a warrant to purchase a number of shares equal to 10% of the number
of Shares sold to its clients (the "Brimberg Warrant"), and (c) a
non-accountable expense allowance equal to 1% of the gross proceeds (excluding
exercise price) resulting from the sale of the Units sold to its clients (the
"Expense Allocation"); provided, however, that Brimberg shall not receive the
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Brimberg Fee, the Brimberg Warrant, the Expense Allocation or any other
compensation in connection with the Offering unless and until its clients
purchase Units resulting in gross proceeds (excluding exercise price) to the
Company in excess of $3.01 million. Unless specifically agreed otherwise in
writing by the Company in its sole discretion, if the aggregate
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proceeds (excluding exercise price) from the sale of the Units to Brimberg's
clients exceed $7 million, the excess will be ignored for purposes of
calculating the Brimberg Fee and the Expense Allocation, and the Shares
included in the Units representing the excess will be ignored for purposes of
calculating the number of shares subject to the Brimberg Warrant. Except as set
forth in the next sentence, Brimberg will not be entitled to any fees, expense
allocation, warrants or other compensation with respect to sales of Units to
investors first invited to participate in the Offering by the Company
independently of Brimberg, whether or not Brimberg subsequently engages in
discussions with such investors (the "Company Identified Investors"). In
addition to the Brimberg Fee, the Expense Allocation and the Brimberg Warrant,
Brimberg will receive a cash fee of 1 1/2% of the gross proceeds (excluding
exercise price) to the Company resulting from the Units sold in the Offering to
Company Identified Investors. The Brimberg Fee shall be payable simultaneously
with the respective Closing giving rise thereto. The Expense Allocation shall
be payable, and the Brimberg Warrant shall be issued, at the final Closing. The
Company reserves the right to terminate the Offering at any time in its sole
discretion due to adverse market conditions or changes in the market price of
its Common Stock. If the Company so terminates the Offering, then it will not
have to pay any compensation to Brimberg other than compensation due to
Brimberg as the result of any Closing (as defined below) and the Company
Expenses (as defined in Exhibit D (the Offering Terms) to the Memorandum). The
exercise prices of the Brimberg Warrant shall be based, pro rata, upon the
exercise price of the Warrants issued to clients of Brimberg as part of the
Units used to calculate the number of shares to be subject to the Brimberg
Warrant.
(e) The undersigned may not withdraw this Subscription
Agreement or any amount paid pursuant thereto except as otherwise provided
below.
The Memorandum, this Subscription Agreement, the Registration Rights
Agreement, the Confidentiality Agreement, the Warrants and the Brimberg Warrant
are collectively referred to herein as the "Offering Documents."
2. Conditions. It is understood and agreed that this
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subscription is made subject to the following terms and conditions:
(a) No Subscription Agreement shall be effective unless
and until it is accepted by the Company. The Company may, in its sole
discretion, reject this subscription in whole or in part for any or no reason.
Unless this subscription is accepted prior to the Termination Date, this
subscription shall be deemed rejected in whole.
(b) At each Closing, the Placement Agent shall have
received an opinion of Ropes & Xxxx, counsel to the Company, addressed to the
Placement Agent on behalf of the Subscribers and dated the date of the Closing,
with respect to the validity of the Shares and Warrants and the enforceability
of the Subscription Agreement, Registration Rights Agreement and the Placement
Agent Agreement between the Company and the Placement Agent, in form and
substance reasonably satisfactory to the Placement Agent and its counsel (the
"Placement Agent Agreement"). The Company hereby instructs such counsel to
address such opinion to the Placement Agent on behalf of the Subscribers.
(c) At the date of each Closing, the Placement Agent
shall have been furnished such information, documents, certificates, and
opinions as it may reasonably require
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under the terms of the Placement Agent Agreement to evidence the accuracy,
completeness, or satisfaction of the representations, warranties, covenants,
agreements, and conditions herein contained or as it otherwise may reasonably
request.
(d) At the final Closing, the Company shall execute and
deliver in favor of Brimberg, the Brimberg Warrant.
(e) At or prior to each Closing, the Company shall
execute and deliver a Registration Rights Agreement in favor of the
Subscribers.
3. Representations and Warranties of the Company. The
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Company represents and warrants to the Placement Agent, as of the date of the
applicable Closing as follows (for purposes of this Paragraph 3, all references
to the "Company" shall be deemed to include Boston Life Sciences, Inc. and all
of its subsidiaries):
(a) Organization. The Company is validly existing and in
good standing under the laws of the State of Delaware with full power and
authority to own, lease, license and use its properties and assets and to carry
out the business in which it is engaged as described in the Memorandum. The
Company is duly qualified to transact the business in which it is engaged as
described in the Memorandum and is in good standing as a foreign corporation in
every jurisdiction in which its ownership, leasing, licensing or use of
property or assets or the conduct of its business makes such qualification
necessary, except where the failure to be so qualified would not have a
material adverse effect on the business, properties, results of operations,
financial condition or prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect").
(b) Authorization of Agreements, Etc. The execution,
delivery and performance by the Company of. this Subscription Agreement and the
Registration Rights Agreement have been duly authorized by all requisite
corporate action of the Company and each, upon execution and delivery thereof
by the Company, will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its respective
terms, subject to bankruptcy, insolvency or similar laws affecting creditor's
rights generally, and general principles of equity and except as the right to
indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
(c) Authorization of the Shares and Warrants. As of the
date of the applicable Closing, the issuance and delivery of the Shares have
been duly authorized by all requisite corporate action of the Company. As of
the date of the applicable Closing, the execution, issuance and delivery of the
Warrants have been duly authorized by all requisite corporate action of the
Company and, when so executed, issued and delivered, the Warrants will be duly
executed, issued and delivered, will constitute valid and legal obligations of
the Company, free and clear of all liens, encumbrances and claims whatsoever,
and will be enforceable as to the Company in accordance with their terms. The
Shares and Warrants are not and will not be subject to preemptive or any other
similar rights of the shareholders of the Company or others, in each case which
rights shall not have been waived or exercised prior to the applicable Closing.
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(d) Authorization of Warrant Shares. As of the date of
the applicable Closing, the issuance, sale and delivery by the Company of the
shares of Common Stock issuable upon conversion of the Warrants and the
Brimberg Warrant (collectively the "Warrant Shares") have been duly authorized
by all requisite corporate action of the Company, and have been duly reserved
for issuance, and upon exercise of the Warrants and the Brimberg Warrant, as
the case may be, and payment of the exercise price therefor, the Warrant Shares
will be validly issued and outstanding, fully paid and nonassessable, free and
clear of all liens, encumbrances and claims whatsoever, and are not subject to
preemptive or any other similar rights of the shareholders of the Company or
others which rights shall not have been waived or exercised prior to the
applicable Closing.
(e) Financial Statements. The financial statements
included in the Memorandum fairly present in all material respects with respect
to the Company the financial position, the results of operations, and the other
information purported to be shown therein of the Company at the respective
dates and for the respective periods to which they apply. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, and are in accordance with the books and records of the
Company covered therein. Except as disclosed in the Memorandum or as has not
resulted in a Material Adverse Effect, since September 30, 2001, there has not
been (i) any change in the financial condition or earnings of the Company and
its subsidiaries taken as a whole, (ii) any obligation, direct or contingent,
incurred by the Company, except obligations in the ordinary course of business,
(iii) any dividend or distribution of any kind declared, paid or made on the
shares of capital stock, as applicable, of the Company, or (iv) any loss or
damage (whether or not insured) to the physical property of the Company. In
addition, since September 30, 2001, the Company has not defaulted on any
payments of principal or interest on any outstanding debt obligations of the
Company other than trade debt.
(f) Capitalization. As of the date of the Memorandum,
the authorized, issued and outstanding share capital of the Company is as set
forth in the Memorandum. All issued and outstanding capital shares of the
Company are validly issued, fully paid and nonassessable and have not been
issued in violation of the preemptive rights of any shareholder of the Company.
All prior sales of securities of the Company were either registered under the
Securities Act of 1933, as amended (the "Securities Act") and applicable state
securities laws in the United States or exempt from such registration.
(g) Preemptive Rights, Etc. Except for the Warrants and
the Brimberg Warrant to be issued in connection with the Offering, and except
as set forth in the Memorandum, there are not, nor will there be immediately
after the Initial Closing or any subsequent Closing, any outstanding warrants,
options, agreements, convertible securities, preemptive rights to subscribe for
or other commitments pursuant to which the Company is, or may become, obligated
to issue any capital stock or other securities of the Company, and the Offering
will not cause any anti-dilution adjustments to such securities or commitments
except as reflected in the Memorandum. Except as set forth in the Memorandum,
the Company is not subject to any agreement, arrangement or understanding that
would require it to repurchase any of its capital stock.
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(h) Subsidiaries and Investments. Except as set forth in
the Memorandum (including without limitation as disclosed in the Company's
latest Annual Report on Form 10-K incorporated by reference therein), the
Company does not own or control, directly or indirectly, any corporation,
association or other entity.
(i) Title. Except as set forth in the Memorandum, the
Company has good and marketable title to all properties and assets owned by it
free and clear of all liens, charges, encumbrances or restrictions, except such
as would not have a Material Adverse Effect. All of the leases and subleases
under which the Company is the lessor or sublessor of properties or assets or
under which the Company holds properties or assets as lessee or sublessee are
in full force and effect, and the Company is not in default of any of the terms
or provisions of any of such leases or subleases where any such default would
have a Material Adverse Effect. No material claim has been asserted by anyone
adverse to rights of the Company as lessor, sublessor, lessee or sublessee
under any of the leases or subleases mentioned above, or affecting or
questioning the right of the Company to continue possession of the leased or
subleased premises or assets under any such lease or sublease, except as would
not have a Material Adverse Effect.
(j) Proprietary Rights. Except as set forth in the
Memorandum, the Company owns or possesses enforceable rights to use all
patents, patent applications, trademarks, services marks, copyrights, trade
secrets, processes or formulations used in the conduct of its business (the
"Proprietary Rights"), except in each case as would not have a Material Adverse
Effect. To the knowledge of the Company, the Company has not infringed and is
not infringing upon the rights of others with respect to Proprietary Rights and
no others have infringed or are infringing on the Proprietary Rights, except in
each case as would not have a Material Adverse Effect.
(k) Litigation. Except as set forth in the Memorandum,
there is no material action, suit, investigation, customer complaint, claim or
proceeding at law or in equity by or before any court, arbitrator, governmental
instrumentality or other agency now pending or, to the best knowledge of the
Company, threatened against the Company (nor is there any basis therefore known
to the Company). The Company is not subject to any judgment, order, writ,
injunction or decree of any federal, state or municipal court, government
department, commission, board, bureau, agency or instrumentality, which if
decided adversely to the Company or its subsidiaries would have a Material
Adverse Effect.
(l) Non-Defaults; Non-Contravention. The Company is not
in violation of or default under, nor will the execution and delivery of this
Subscription Agreement or any of the Offering Documents or consummation of the
transactions contemplated herein or therein result in a violation of or
constitute a default in the performance or observance of any obligation under,
(i) the Certificate of Incorporation or bylaws of the Company (or other charter
documents as the case may be), or (ii) any order, writ, injunction or decree of
any court of the United States or any other applicable governmental department,
commission, board, bureau, agency or instrumentality of the United States. In
addition, the Company is not in violation of or default under any indenture,
mortgage, contract or other agreement or instrument to which it is a party or
by which it or its property is bound or affected which after notice, the lapse
of time or both, would constitute a default under any of the foregoing, which
in any such case would have a Material Adverse Effect.
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(m) Taxes. The Company has filed all necessary federal,
state and local tax returns which are required to be filed by it and all such
returns are true and correct in all material respects. The Company has paid all
taxes pursuant to such returns or pursuant to any assessments received by it or
which it is obligated to withhold from amounts owing to any employee, creditor
or third party. The Company has properly accrued all taxes required to be
accrued. To the Company's knowledge, the tax returns of the Company are not
currently the subject of an audit by any federal, state or local authority. The
Company has not waived any statute of limitations with respect to taxes or
agreed to any extension of time with respect to any material tax assessment or
deficiency.
(n) Compliance With Laws; Licenses, Etc. The Company is
in compliance with all federal, state or local laws including in each case the
laws of its jurisdiction of incorporation, ordinances, regulations and orders
applicable to its business, except where non-compliance would not have a
Material Adverse Effect. The Company has all licenses and permits and other
governmental certificates, authorizations and permits and approvals
(collectively, "Licenses") required by every federal, state or local,
government or regulatory body for the operation of its business as currently
conducted and the use of its properties, except where the failure to be
licensed would not have a Material Adverse Effect. Except as would not have a
Material Adverse Effect, the Licenses of the Company are in full force and
effect, and no violations are or have been recorded in respect of any License
and no proceeding is pending or threatened to revoke or limit any thereof.
(o) Insurance. The Company maintains insurance with
insurers of recognized financial responsibility of the types and in the amounts
generally deemed adequate for its respective business and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company, against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; since June 1975, the Company has not (i)
had any insurance coverage canceled and (ii) to the best knowledge of the
Company, been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at
a cost that would not have a Material Adverse Effect.
(p) Labor Relations. No labor disturbance by the
employees of the Company exists or to the best of the Company's knowledge, is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, licensors,
collaborators or subcontractors that might reasonably be expected to result in
a Material Adverse Effect. No collective bargaining agreement exists with any
of the Company's employees and, to the best of the Company's knowledge, no such
agreement is imminent.
(q) ERISA. Each "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation
or other benefits to any current or former director, officer, employee or
consultant (or to any dependent or beneficiary thereof), of the Company, which
are
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now, or were in the past, maintained by the Company have been maintained in
compliance with their terms and the provisions of applicable law, including,
without limitation, ERISA and the Internal Revenue Code of 1986, as amended,
except in each case where such non-compliance would not have a Material Adverse
Effect.
(r) Environmental. The operations of the Company with
respect to any real property currently leased, owned or by any means controlled
by the Company (the "Real Property") are in compliance in all material respects
with all federal, state, and local laws, ordinances, rules, and regulations
relating to occupational health and safety and the environment; the Company
maintains all licenses, permits and authorizations necessary to operate under
all such laws applicable to it; and there is no pending or, to the best
knowledge of the Company, threatened, claim, litigation or any administrative
agency proceeding, nor has the Company received any written or oral notice from
any governmental entity or third party, that: (i) alleges a violation of any
such laws by the Company; (ii) alleges that the Company is a liable party under
the Comprehensive Environmental Response, Compensation, and Liability Act, as
amended, 42 U.S.C. [sect] 9601 et seq. ("CERCLA"), or any state superfund law;
(iii) alleges possible contamination of the environment by the Company; or (iv)
alleges possible contamination of the Real Property. The Company has not
received any written or oral notice from any governmental entity or third party
that any Real Property which is owned, leased or occupied by the Company has
been designated as a Superfund site pursuant to CERCLA or otherwise designated
as a contaminated site under applicable state or local law.
(s) Internal Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) Right of First Refusal. Except as set forth in the
Memorandum, no preemptive right, right of first refusal granted by the Company
or other similar rights exists with respect to the issuance of the Shares,
Warrants and Brimberg Warrant by the Company.
(u) Exemption from Registration. Assuming the accuracy
of the information provided by the respective Subscribers in the Subscription
Agreements and assuming that the Placement Agent has not taken any action or
omitted to take any action such that the exemption provided by Section 4(2) of
the Securities Act and Rule 506 thereunder is rendered unavailable to the
Company, the offer and sale of the Units and the issuance of the Brimberg
Warrant pursuant to the terms of this Agreement are exempt from the
registration requirements of the Securities Act and the rules and regulations
promulgated thereunder.
(v) Accuracy of Disclosure. The information contained in
the Offering Documents as of the date of the Memorandum does not contain, and
as of each Closing, will not contain, an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
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(w) Investment Company. The Company is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and neither the sale of the Units nor the
transactions contemplated herein will cause the Company to become an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act.
(x) Brokers. The Company is not a "broker" within the
meaning of Section 3(a)(4) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act or required to be registered pursuant to Section 15(a) of the
Exchange Act.
(y) Miscellaneous. Neither the Company, nor, to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has, directly or indirectly, (i) used any Company funds for unlawful
contributions, gifts, entertainment or other unlawful payment related to
foreign or domestic political activity; (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from Company funds; (iii) failed to disclose
fully any contribution made by the Company or made by any person acting on its
behalf and of which the Company is aware in violation of law; (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended; or (v) made any unlawful bribe, rebate, payoff, influence,
kick-back or other unlawful payment.
(z) Registration Rights. Other than as set forth in the
Memorandum, no holder of the Company's securities has the right to require the
Company to include such securities in the Registration Statement to be filed
under Sections 2.1 of the Registration Rights Agreement.
(aa) S-3 Eligibility. The Company is eligible to register
the Shares and the Warrant Shares on Form S-3 with the Securities and Exchange
Commission (the "SEC").
4. Representations, Warranties and Covenants of the
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Subscriber. The undersigned hereby represents and warrants to, and agrees with,
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the Company as follows, as of the date hereof and as of each applicable Closing:
(a) The undersigned is an "Accredited Investor" as that
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act. Specifically the undersigned is (check appropriate items(s)):
_____(i) 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 Exchange Act; an insurance company as defined in Section
2(13) of the Securities Act; an investment company registered under the
Investment Company Act or a business development company as defined in Section
2(a)(48) of the Investment Company Act; a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958; a plan established and
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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 $5,000,000; an employee
benefit plan within the meaning of ERISA, if the investment decision is made by
a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank,
savings and loan association, insurance company, or registered advisor, or if
the employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors.
_____(ii) A private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act.
_____(iii) An organization described in Section 501(c)(3)
of the Internal Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $5,000,000.
_____(iv) A director or executive officer of the Company.
______(v) A natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his or her purchase
exceeds $1,000,000. (California residents. please see Section 4(b) below.)
_____(vi) A natural person who had an individual income
in excess of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year.
(California residents. please see Section 4(b) below.)
____(vii) A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the Securities Act (i.e., a person who has such
knowledge and experience in financial and business matters that he is capable
of evaluating the merits and risks of the prospective investment).
___(viii) An entity in which all of the equity owners are
accredited investors. (If this alternative is checked, the undersigned must
identify each equity owner and provide statements signed by each demonstrating
how each is qualified as an accredited investor.)
(b) For California individuals: If the Subscriber is a
California resident, such subscriber's investment in the Company will not
exceed 10% of such Subscriber's net worth (or joint net worth with his spouse).
(c) If a natural person, the undersigned is: a bona fide
resident of the State contained in the address set forth on the signature page
of this Subscription Agreement as the undersigned's home address; at least 21
years of age; and legally competent to execute this Subscription Agreement. If
an entity, the undersigned is duly authorized to execute this Subscription
Agreement and this Subscription Agreement constitutes the legal, valid and
binding obligation of the undersigned enforceable against the undersigned in
accordance with its terms.
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(d) The undersigned has received, read carefully and is
familiar with this Subscription Agreement and the Memorandum. Respecting the
Company, the undersigned is familiar with the Company's business, plans and
financial condition, the terms of the Offering and any other matters relating
to the Offering; the undersigned has received all materials which have been
requested by the undersigned; has had a reasonable opportunity to ask questions
of the Company and its representatives; and the Company has answered all
inquiries that the undersigned or the undersigned's representatives have put to
it. The undersigned has had access to all additional information necessary to
verify the accuracy of the information set forth in this Subscription Agreement
and the Memorandum and any other materials furnished herewith, and has taken
all the steps necessary to evaluate the merits and risks of an investment as
proposed hereunder.
(e) The undersigned or the undersigned's purchaser
representative has such knowledge and experience in finance, securities,
investments and other business matters so as to be able to protect the
interests of the undersigned in connection with this transaction, and the
undersigned's investment in the Company hereunder is not material when compared
to the undersigned's total financial capacity.
(f) The undersigned understandsthe various risks of an
investment in the Company as proposed herein and can afford to bear such risks,
including, without limitation, the risks of losing the entire
investment.
(g) The undersigned acknowledges that no market for the
Shares, the Warrants or the Warrant Shares (collectively, the "Securities")
presently exists and none may develop in the future and that the undersigned
may find it impossible to liquidate the investment at a time when it may be
desirable to do so, or at any other time.
(h) The undersigned has been advised by the Company that
none of the Securities have been registered under the Securities Act, that the
Securities will be issued on the basis of the statutory exemption provided by
Section 4(2) of the Securities Act or Regulation D promulgated thereunder, or
both, relating to transactions by an issuer not involving any public offering
and under similar exemptions under certain state securities laws, that this
transaction has not been reviewed by, passed on or submitted to any Federal or
state agency or self-regulatory organization where an exemption is being relied
upon, and that the Company's reliance thereon is based in part upon the
representations made by the undersigned in this Subscription Agreement. The
undersigned acknowledges that the undersigned has been informed by the Company
of, or is otherwise familiar with, the nature of the limitations imposed by the
Securities Act and the rules and regulations thereunder on the transfer of the
Securities. In particular, the undersigned agrees that no sale, assignment or
transfer of any of the Securities shall be valid or effective, and the Company
shall not be required to give any effect to such a sale, assignment or
transfer, unless (i) the sale, assignment or transfer of such Securities is
registered under the Securities Act, it being understood that such Securities
are not currently registered for sale and that the Company has no obligation or
intention to so register the Securities except as contemplated by the terms of
the Offering Documents, or (ii) the Securities are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
under the Securities Act, it being understood that Rule 144 is not available at
the present time for the sale of the securities, or (iii) such sale, assignment
or transfer is otherwise exempt from registration under the Securities Act.
The undersigned further understands that an opinion of counsel and
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other documents may be required to transfer such Securities. The undersigned
acknowledges that the Securities shall be subject to a stop transfer order and
the certificate or certificates evidencing each of the Securities shall bear
the following or a substantially similar legend or such other legend as may
appear on the forms of Securities and such other legends as may be required by
state blue sky laws:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS, SUPPORTED BY AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
(i) The undersigned will acquire the Securities for the
undersigned's own account (or for the joint account of the undersigned and the
undersigned's spouse either in joint tenancy, tenancy by the entirety or
tenancy in common) for investment and not with a view to the sale or
distribution thereof or the granting of any participation therein, and has no
present intention of distributing or selling to others any of such interest or
granting any participation therein.
(j) It never has been represented, guaranteed or
warranted to the undersigned by any broker, the Company, the Placement Agent,
any of the officers, directors, stockholders, partners, employees or agents of
either the Company, the Placement Agent, or any other persons, whether
expressly or by implication, that:
(i) the Company or the undersigned will realize any
given percentage of profits and/or amount or type of
consideration, profit or loss as a result of the Company's
activities or the undersigned's investment in the Company; or
(ii) the past performance or experience of the
management of the Company, or of any other person, will in any
way indicate the predictable results of the ownership of the
securities or of the Company's activities.
(k) No oral or written representations have been made
other than as stated in the Memorandum, and no oral or written information
furnished to the undersigned or the undersigned's advisor(s) in connection with
the Offering was in any way inconsistent with the information stated in the
Memorandum.
(l) The undersigned is not subscribing for the Units as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any
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seminar or meeting, or any solicitation of a subscription by a person other
than a representative of the Placement Agent or the Company with which the
undersigned had a pre-existing relationship in connection with investments in
securities generally.
(m) The undersigned is not relying on the Company with
respect to the tax and other economic considerations of an investment.
(n) The undersigned understands that the net proceeds
from all subscriptions paid and accepted pursuant to the Offering (after
deduction for expenses of the Offering, including the fees and expenses payable
to the Placement Agent) will be used in all material respects for the purposes
set forth in the Memorandum.
(o) Without limiting any of the undersigned's other
representations and warranties hereunder, the undersigned acknowledges that the
undersigned has reviewed and is aware of the risk factors described in the
Memorandum.
(p) The undersigned acknowledges that the
representations, warranties and agreements made by the undersigned herein shall
survive the execution and delivery of this Subscription Agreement, the purchase
of the Units and the exercise of the Warrants.
(q) The undersigned understands that the Placement Agent
does not make any representations or warranties concerning the accuracy or
completeness of any information relating to the Company or its operations, to
be delivered to prospective investors in connection with the Offering.
(r) The undersigned has consulted its or his own
financial, legal and tax advisors with respect to the economic, legal and tax
consequences of an investment in the Units and has not relied on the Memorandum
or the Company, its officers, directors or professional advisors for advice as
to such consequences.
5. Covenants of the Company.
------------------------
(a) Listing. The Company shall cause all Shares and
Warrant Shares to be listed on Nasdaq by the date that Nasdaq rules require.
(b) S-3 Eligibility. The Company will take all actions
necessary to maintain its eligibility to register the resale of the Shares and
the Warrant Shares on Form S-3 as contemplated by Section 2.1 of the
Registration Rights Agreement until such time as the Shares and Warrant Shares
no longer constitute Registrable Securities (as defined in the Registration
Rights Agreement).
6. Indemnification. The undersigned acknowledges that the
---------------
undersigned understands the meaning and legal consequences of the
representations and warranties contained in Section 4 hereof, and agrees to
indemnify and hold harmless the Company, the Placement Agent, and their
respective partners, incorporators, officers, directors, partners, employees,
agents and controlling persons of each thereof, past, present or future, from
and against any and all loss, damage or liability due to or arising out of a
breach of any such representation or warranty.
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7. Transferability. Neither this Subscription Agreement, nor
---------------
any interest of the undersigned herein, shall be assignable or transferable by
the undersigned in whole or in part except by operation of law. Any attempt to
assign or transfer this agreement or any interest therein other than by
operation of law shall be void.
8. Miscellaneous.
-------------
(a) The Offering Documents and the exhibits thereto set
forth the entire understanding of the parties with respect to the subject
matter hereof, supersede all existing agreements among them concerning such
subject matter, and may be modified only by a written instrument duly executed
by the party to be charged.
(b) Except as otherwise specifically provided herein, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested,
or by Federal Express, Express Mail or similar overnight delivery or courier
service or delivered (in person or by telecopy, telex or similar
telecommunications equipment) against receipt to the party to whom it is to be
given, (i) if to the Company, at the address set forth on the first page
hereof, (ii) if to the undersigned, at the address set forth on the signature
page hereof, or (iii) in either case, to such other address as the party shall
have furnished in writing in accordance with the provisions of this Section
8(b). Notice to the estate of any party shall be sufficient if addressed to
the party as provided in this Section 8(b). Any notice or other communication
given by certified mail shall be deemed given at the time of certification
thereof, except for a notice changing a party address which shall be deemed
given at the time of receipt thereof. Any notice given by other means
permitted by this Section 8(b) shall be deemed given at the time of receipt
thereof.
(c) This Subscription Agreement shall be binding upon and
inure to the benefit of the parties hereto, the successors and assigns of the
Company, and the permitted successors, assigns, heirs and personal
representatives of the undersigned (including permitted transferees of the
Securities).
(d) The headings in this Subscription Agreement are
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Subscription Agreement.
(e) This Subscription Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(f) This Subscription Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to principles governing conflicts of law.
(g) This Subscription Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Subscription Agreement (except as provided in Sections 6, 8(c)
and 8(g)); provided, that the Placement Agent shall be entitled to rely on, and
shall be a third party beneficiary of, the representations, warranties and
agreements contained in this Subscription Agreement.
-14-
(h) The parties hereto irrevocably consent to the
exclusive jurisdiction of the courts of the Commonwealth of Massachusetts and
of any federal court located in such Commonwealth in connection with any action
or proceeding arising out of or relating to the Offering Documents, any
document or instrument delivered pursuant to, in connection with or
simultaneously with the Offering Documents, or a breach of any Offering
Documents or any such document or instrument. In any such action or
proceeding, each party hereto waives personal service of any summons, complaint
or other process and agrees that service thereof may be made in accordance with
Section 8(b). Within 30 days after such service, or such other time as may be
mutually agreed upon in writing by the attorneys for the parties to such action
or proceeding, the party so served shall appear or answer such summons,
complaint or other process.
- 15 -
IN WITNESS WHEREOF, the parties hereto have executed this Subscription
Agreement as of the day and year this subscription has been accepted by the
Company as set forth below.
Aggregate Dollar Amount
of Subscription _____________________________________________
Print Name of Subscriber
(NOTE: This is the name in which the Shares
and Warrants shall be registered.)
$_______________ By:_______________________________________
(Signature of Subscriber or
Authorized Signatory)
Social Security Number or other
Taxpayer Identification Number:
____________________________________
Address:
____________________________________
If the Units will be held as joint
tenants, tenants in common, or community
property, please complete the following:
____________________________________
Print name of spouse or other
co-subscriber
____________________________________
Signature of spouse or other
co-subscriber
____________________________________
Print manner in which the Shares and
Warrants will be held
____________________________________
Social Security Number
[Please complete Section 4 for each Subscriber.
[To be completed by the Company]
ACCEPTED AS TO ___________ UNITS, REPRESENTING $____________ AGGREGATE DOLLAR
AMOUNT OF OFFERING PRICE, WITH $___________ TO BE REFUNDED TO THE SUBSCRIBER
BY: BOSTON LIFE SCIENCES INC. DATE: ____________ __, 2002
By:____________________________
Name:
Title:
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