Exhibit 99.3
COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 4,
2003, by and among BOSTON LIFE SCIENCES, INC., a Delaware corporation (the
"Company"), and each of the purchasers set forth on the execution page hereof
(individually, a "Purchaser" and collectively, the "Purchasers").
WHEREAS:
A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act").
B. The Company desires to sell, and the Purchasers desire to purchase, upon
the terms and conditions stated in this Agreement, an aggregate of 10,000,000
shares of common stock of the Company, par value $.01 per share (the "Shares"),
at a price of $1.00 per Share.
C. All references herein to monetary denominations shall refer to lawful
money of the United States of America.
NOW, THEREFORE, the Company and the Purchasers, intending to be legally
bound, hereby agree as follows:
1. PURCHASE AND SALE OF SHARES
a. Purchase of Shares. On the Closing Date, subject to the satisfaction (or
waiver) of the conditions set forth in Section 5 and Section 6 below, the
Company shall issue and sell to each Purchaser, and each Purchaser severally
agrees to purchase from the Company, the number of Shares for the aggregate
purchase price set forth opposite such Purchaser's name on Attachment 1 hereto
(the "Purchase Price"), which Purchase Price reflects a price of $1.00 per
Share. Each Purchaser's obligation to purchase its Shares hereunder is distinct
and separate from each other Purchaser's obligation to purchase its Shares, and
no Purchaser shall be required to purchase hereunder more than the number of its
Shares set forth opposite such Purchaser's name on Attachment 1 hereto
notwithstanding any failure by any other Purchaser to purchase its Shares
hereunder nor shall any Purchaser have any liability by reason of any such
failure by any other Purchaser.
b. Form of Payment. On or before the Closing Date, each Purchaser shall
issue payment instructions to Xxxxxxx & Xxxxxx, L.L.C., as representative of the
Purchasers (the "Representative") or otherwise make available the Purchase Price
for the Shares to be purchased by such Purchaser at the Closing. On the Closing
Date, the Representative shall transfer or cause to be transferred, on behalf of
each Purchaser, the Purchase Price for the Shares being purchased by such
Purchaser at the Closing to the Company, such payment to be made by wire
transfer of immediately available funds in accordance with the Company's written
wiring instructions,
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against delivery of the duly executed Shares being purchased by such Purchaser,
and the Company shall deliver such Shares against delivery of such Purchase
Price.
c. Closing Date. Subject to the satisfaction (or waiver) of the relevant
conditions thereto set forth in Section 5 and Section 6 below, the date and time
of the issuance and sale of the Shares pursuant to this Agreement (the
"Closing") shall be 9:30 A.M. Eastern Time on March 12, 2003, or such other time
as may be mutually agreed upon by the Company and the Purchasers (the "Closing
Date"). Subject to Section 7(b) hereof, the Closing shall occur at the offices
of counsel to the Company, Ropes & Xxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
XX 00000.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally, but not jointly, represents and warrants to the
Company as follows:
a. Purchase for Own Account, Etc. Such Purchaser is acquiring the Shares in
the ordinary course of its business for such Purchaser's own account and not
with a present view toward the public sale or distribution thereof. Such
Purchaser understands that such Purchaser must bear the economic risk of this
investment indefinitely, unless the Shares are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws or an
exemption from such registration is available, and that the Company has no
present intention of registering any such Shares other than as contemplated by
the Addendum (as defined in Section 5(a) hereof). Such Purchaser understands
that: (i) the Shares are "restricted securities" (as such term is defined in
Rule 144 promulgated under the Securities Act), (ii) the Company has no present
intention of registering the Shares under the Securities Act and (iii) the
Shares may only be sold or transferred pursuant to an exemption from
registration under the Securities Act and any applicable state securities laws.
b. Accredited Investor and Interested Stockholder Status. (i) Such
Purchaser is an "Accredited Investor" as that term is defined in Rule 501(a) of
Regulation D.
(i) Such Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
the purchase of the Shares pursuant to this Agreement.
(ii) Such Purchaser has the power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly authorized by all necessary action on
the part of such Purchaser. This Agreement has been duly and validly
executed and delivered by such Purchaser and constitutes the legal, valid
and binding obligation of such Purchaser, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
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(iii) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state,
or local governmental authority on the part of such Purchaser is required
in connection with the valid execution and delivery by such Purchaser of
this Agreement, or the consummation by such Purchaser of the transactions
contemplated hereby, except for such filings as have been made prior to the
Closing.
(iv) Such Purchaser, if other than an individual (A) is duly organized
or formed, validly existing under the laws of the jurisdiction of its
organization or formation and (B) has all requisite power and authority to
carry on its business as currently conducted. Such Purchaser, if an
individual, has the capacity to enter into this Agreement and perform such
person's obligations hereunder.
c. Reliance on Exemptions. Such Purchaser understands that the Shares are
being offered and sold to such Purchaser in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and such
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Shares.
d. Information. Such Purchaser has received or had access to copies of the
Financial Statements (as defined below), as well as all other materials relating
to the business, finances and operations of the Company and its subsidiaries and
materials relating to the offer and sale of the Shares which have been
specifically requested by such Purchaser or which are publicly available in the
Company's filings with the Securities and Exchange Commission (the "SEC"). Such
Purchaser has been afforded the opportunity to ask questions of the Company and
has received what such Purchaser believes to be satisfactory answers to any such
inquiries. Neither such inquiries nor any other due diligence investigation
conducted by such Purchaser or any of its representatives shall modify, amend or
affect such Purchaser's right to rely on the Company's representations and
warranties contained in Section 3 below. Such Purchaser understands that such
Purchaser's investment in the Shares involves a high degree of risk.
e. Governmental Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Shares.
f. Transfer or Resale. Such Purchaser understands that (i) the Shares have
not been and are not being registered under the Securities Act or any state
securities laws, and may not be transferred unless (a) subsequently registered
thereunder, or (b) the Shares to be sold or transferred may be sold or
transferred under an exemption from such registration (including any sale or
transfer to an affiliate of such Purchaser who is an Accredited Investor), or
(c) sold under Rule 144 promulgated under the Securities Act (or a successor
rule) ("Rule 144"), and (ii) neither the Company nor any other person is under
any obligation to register such Shares under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case, other than as contemplated by the Addendum (as defined
in Section 5(a) hereof).
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g. Legends. Such Purchaser understands that until the Shares have been
registered under the Securities Act (including registration pursuant to Rule 415
thereunder) and have been sold pursuant to such registration or otherwise may be
sold by such Purchaser under Rule 144, the certificates for the Shares will bear
a restrictive legend in substantially the following form:
These Shares have been acquired for investment purposes only and have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under any applicable state securities laws. These
Shares may not be sold or otherwise transferred or pledged, except
pursuant to an effective registration statement under the Securities Act
and such applicable state securities laws or if the proposed sale,
transfer or pledge may be effected under an exemption from registration
under the Securities Act and under an exemption from registration or
qualification under applicable state securities laws.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Shares upon which it is
stamped, if, unless otherwise required by state securities laws, (a) the sale of
such Shares is registered under the Securities Act and such Shares are sold
pursuant to such registration, or (b) such holder provides the Company with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Shares may be made without registration under the Securities Act or (c)
such holder provides the Company with reasonable assurances that such Shares can
be sold under Rule 144. Such Purchaser agrees to sell Shares only pursuant to an
effective registration statement or under an exemption from the registration
requirements of the Securities Act.
h. Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Purchaser and is a valid
and binding agreement of such Purchaser enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to
the enforcement of creditors' rights and remedies or by other equitable
principles of general application.
i. Beneficial Ownership. Immediately following the transactions
contemplated by this Agreement, each signatory to this Agreement, individually
or together with any other person or persons with whom such Purchaser is acting
as a partnership, limited partnership, limited liability company, syndicate or
other group for the purposes of acquiring, holding, or disposing of securities
or material assets of the Company, will not have "beneficial ownership" (within
the meaning given to such term in Rule 13(d)(3) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of more than 19.99% of the
Company's Common Stock.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
For purposes of this Agreement, "Material Adverse Effect" shall mean any
material adverse effect on (i) the ability of the Company to perform its
obligations hereunder or (ii) the
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business, operations, properties, prospects or financial condition of the
Company and its subsidiaries, taken as a whole.
The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. The Company and each of its subsidiaries
is a corporation duly organized and existing in good standing under the laws of
the jurisdiction in which it is incorporated, and has the requisite corporate
power to own its properties and to carry on its business as now being conducted.
The Company and each of its subsidiaries is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect.
b. Authorization; Enforcement. As of the Closing Date, (i) The Company has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement and to issue and sell the Shares in accordance
with the terms hereof; (ii) except as contemplated in Section 5(g) below, the
execution, delivery and performance of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby (including, without
limitation, the issuance of the Shares), have been duly authorized by the
Company's Board of Directors and no further consent or authorization of the
Company, its Board of Directors or its stockholders is required; and (iii) this
Agreement is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
c. Stockholder Authorization. Except as contemplated in Section 5(g) below,
neither the execution, delivery or performance by the Company of its obligations
under this Agreement, nor the consummation by the Company of the transactions
contemplated hereby (including, without limitation, the issuance of the Shares)
requires any consent or authorization of the Company's stockholders.
d. Capitalization. The capitalization of the Company as of the date hereof,
including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, and the number of shares issuable and reserved
for issuance pursuant to securities exercisable for, or convertible into or
exchangeable for any shares of capital stock is set forth on Schedule 3(d). All
of such outstanding shares of capital stock have been, or upon issuance will be,
validly issued, fully paid and nonassessable. The issuance of the Shares
hereunder will not trigger any preemptive rights or any other similar rights of
the stockholders of the Company, except for any such rights as disclosed on
Schedule 3(d) and which shall have been waived prior to the Closing Date. Except
as disclosed in Schedule 3(d), as of the date of this Agreement, (i) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of the Company or any of its subsidiaries, or arrangements by which the
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Company or any of its subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its subsidiaries, and (ii)
there are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their securities
under the Securities Act. Except as disclosed in Schedule 3(d), there are no
securities or instruments of the Company containing antidilution or similar
provisions that will or may be triggered by the issuance of the Shares in
accordance with the terms of this Agreement. To the extent required by the
applicable rules and regulations of the SEC, the Company has filed with the SEC
true and correct copies of the Company's Certificate of Incorporation as in
effect on the date hereof and By-laws as in effect on the date hereof and all
instruments and agreements governing securities of the Company or instruments
convertible into or exercisable or exchangeable for capital stock of the
Company.
e. No Conflicts. The execution, delivery and performance of this Agreement
by the Company, and the consummation by the Company of the transactions
contemplated hereby (including, without limitation, the issuance of the Shares)
will not (i) result in a violation of the Certificate of Incorporation or
By-Laws or (ii) except as contemplated in Section 5(g) below, conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument, to which the Company or any of its subsidiaries is a party, or
result in a violation of any law, rule, regulation, order, judgment or decree
(including U.S. federal and state securities laws and regulations) applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected. Neither the Company nor
any of its subsidiaries is in violation of its Certificate of Incorporation,
By-laws or other organizational documents and neither the Company nor any of its
subsidiaries is in default (and no event has occurred which, with notice or
lapse of time or both, would put the Company or any of its subsidiaries in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party. The respective businesses of the
Company and its subsidiaries are not being conducted, and shall not be conducted
so long as any Purchaser owns any of the Shares, in violation of any law,
ordinance, regulation, rule, decision or order of any governmental agency or
body or any court, domestic or foreign, except for possible violations the
sanctions for which, either singly or in the aggregate, would not have a
Material Adverse Effect. Except as disclosed on Schedule 3(e), in Section 5(g)
below, or as specifically contemplated by this Agreement and as required under
the Securities Act, any applicable state securities laws, and the Marketplace
Rules of the NASDAQ markets, the Company is not required to obtain any consent,
approval, authorization or order of, or make any filing or registration with,
any governmental agency or body, court, any regulatory or self regulatory agency
or other third party in order for it to execute, deliver or perform any of its
obligations under this Agreement in accordance with the terms hereof.
f. Financial Statements. The Company has filed with the SEC true and
correct copies of (i) the audited consolidated balance sheets of the Company and
its audited consolidated subsidiaries as of December 31, 2001, and the related
consolidated statements of operations, comprehensive loss and stockholders'
equity and cash flows for the year then ended, including footnotes thereto,
audited by PricewaterhouseCoopers LLP, independent public accountants and
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(ii) the unaudited consolidated balance sheets of the Company and its
consolidated subsidiaries as of September 30, 2002, and the related consolidated
statements of operations, comprehensive loss and stockholders' equity and cash
flows for the three months and the nine months then ended (collectively, the
"Financial Statements"). As of their respective dates, the Financial Statements
complied in all material respects with applicable accounting requirements. Such
Financial Statements have been prepared in accordance with U.S. generally
accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to immaterial
year-end audit adjustments). Subject to the next sentence of this Section 3(f),
except as set forth in the Financial Statements or as set forth on Schedule
3(f), the Company has no liabilities, contingent or otherwise, other than (i)
liabilities (other than liabilities for borrowed money) incurred in the ordinary
course of business subsequent to the date of such Financial Statements and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in such Financial Statements.
g. Absence of Certain Changes. Except as set forth on Schedule 3(g) and as
contemplated herein, since September 30, 2002, neither the Company nor any of
its subsidiaries has:
(i) issued any stock, bonds or other corporate securities or any
rights, options or warrants with respect thereto;
(ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except trade payables incurred in the
ordinary course of business;
(iii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current
liabilities paid in the ordinary course of business consistent with past
practices;
(iv) declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or purchased or
redeemed, or made any agreements so to purchase or redeem, any shares of
its capital stock;
(v) mortgaged or pledged any of its assets, tangible or intangible, or
subjected them to any material lien, charge or other encumbrance, except in
the ordinary course of business consistent with past practices;
(vi) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business
consistent with past practices;
(vii) sold, assigned or transferred any patents, patent rights,
trademarks, trade names, copyrights, trade secrets or other intangible
assets or Intangibles (as defined in Section 3(i)), including without
limitation, any rights to use any Intangibles, under any licenses, or
disclosed any proprietary confidential information to any persons except to
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potential customers, investors or corporate or academic partners or
collaborators in the ordinary course of business consistent with past
practices;
(viii) suffered any substantial losses or waived any rights of
material value, whether or not in the ordinary course of business, or
suffered the loss of any material amount of prospective business except
as reflected in the Financial Statements;
(ix) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices and not
in excess of $10,000;
(x) adopted any employee benefits;
(xi) made capital expenditures or commitments therefor that
aggregate in excess of $25,000 for the Company and its subsidiaries;
(xii) entered into any other material transaction other than
in the ordinary course of business;
(xiii) made charitable contributions or pledges in excess of
$5,000 in the aggregate;
(xiv) suffered any material damage, destruction or casualty
loss, whether or not covered by insurance;
(xv) experienced any union organizing effort, strike
problems with labor or management in connection with the terms and
conditions of their employment;
(xvi) knowledge of any matter, event or condition not
otherwise publicly disclosed by the Company which constitutes a
Material Adverse Effect; or
(xvii) effected or agreed to do any of the foregoing.
h. Absence of Litigation. Except as disclosed on Schedule 3(h),
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body,
pending or, to the knowledge of the Company or any of its subsidiaries,
threatened against the Company, any of its subsidiaries, or any of their
respective directors or officers in their capacities as such, which would be
reasonably likely to have a Material Adverse Effect.
i. Intellectual Property. Each of the Company and its subsidiaries
owns or is licensed to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, permits, inventions, discoveries, processes, scientific,
technical, engineering and marketing data, object and source codes, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "Intangibles") necessary for the conduct of
its business as now being conducted. To the best knowledge of the Company,
neither the Company nor any subsidiary of the Company infringes or is in
conflict with any right of any other person with respect to any Intangibles,
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except for any such infringement or conflict that would not, either singly or in
the aggregate, have a Material Adverse Effect. Neither the Company nor any of
its subsidiaries has received written notice of any pending conflict with or
infringement upon such third party Intangibles. Neither the Company nor any of
its subsidiaries has entered into any consent, indemnification, forbearance to
xxx or settlement agreements with respect to the validity of the Company's or
its subsidiaries' ownership or right to use its Intangibles and, to the best
knowledge of the Company, there is no reasonable basis for any such claim to be
successful. The Intangibles are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company and its subsidiaries have
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Intangibles used pursuant to
licenses. To the best knowledge of the Company, no person is infringing on or
violating the Intangibles owned or used by the Company or its subsidiaries.
Except as disclosed on Schedule 3(i), neither the Company nor any of its
subsidiaries has sublicensed any licenses or rights thereunder in whole or in
part held by the Company or any of its subsidiaries in any Intangibles.
j. Foreign Corrupt Practices. Neither the Company, nor any of its
subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any subsidiary has, in the course of his actions
for, or on behalf of, the Company or any of its subsidiaries, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses; made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.
k. Disclosure. Neither this Agreement nor the Financial Statements
nor any other agreement, document, certificate or statement, whether oral or
written, included in the Company's filings with the SEC pursuant to the Exchange
Act or furnished to any Purchaser or its counsel by or on behalf of the Company
in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
l. Acknowledgment Regarding the Purchasers' Purchase of the Shares.
The Company acknowledges and agrees that none of the Purchasers is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement or the transactions contemplated hereby, and the
relationship between the Company and each Purchaser is "arms length" and that
any statement made by any Purchaser or any of its representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to such Purchaser's purchase
of Shares and has not been relied upon by the Company, its officers or directors
in any way. The Company further represents to each Purchaser that the Company's
decision to enter into this Agreement has been based solely on an independent
evaluation by the Company and its representatives.
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m. No General Solicitation. Neither the Company nor any person
participating on the Company's behalf in the transactions contemplated hereby
has conducted any "general solicitation," as such term is defined in Regulation
D, with respect to any of the Shares being offered hereby.
n. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Shares being offered hereby under the Securities Act or cause this offering of
Shares to be integrated with any prior offering of securities of the Company for
purposes of the Securities Act.
o. No Brokers. The Company has taken no action, that would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.
p. Tax Status. The Company and each of its subsidiaries has made or
filed all U.S. federal, state and local income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its subsidiaries has
set aside on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company
has not executed a waiver with respect to any statute of limitations relating to
the assessment or collection of any federal, state or local tax. None of the
Company's tax returns is being audited by any taxing authority.
q. Title. Each of the Company and its subsidiaries has good and
marketable title in fee to such of its fixed assets that is real property, and
good and merchantable title to all of its other assets, now carried on its
books, which assets consist of those reflected in the most recent balance sheets
of the Company and its consolidated subsidiaries which are included in the
Financial Statements or acquired since the date of the balance sheets included
in such Financial Statements (except personal property disposed of since said
date in the ordinary course of business) free of any mortgages, pledges,
charges, liens, security interests or other encumbrances except as set forth on
Schedule 3(q). Each of the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all leases under which it is operating, and all
said leases are valid and existing and in full force and effect and no default
or event of default exists thereunder.
r. Insurance. The Company has in force fire, casualty, directors'
and officers' liability, errors and omissions, professional liability, product
liability and other insurance policies, with extended coverage, sufficient in
amount to allow it to replace any of its presently existing material properties
or assets which might be damaged or destroyed or sufficient to cover liabilities
to which the Company may reasonably become subject, and such types and amounts
of other insurance with respect to its business and properties as presently
existing on both a per
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occurrence and an aggregate basis, as are customarily carried by persons engaged
in the same or similar business as the Company. To the best knowledge of the
Company, no default or event has occurred that could give rise to a default
under any such policy.
s. Environmental Matters. There is no environmental litigation or
other environmental proceeding pending or, to the Company's knowledge,
threatened by any governmental or regulatory agency or others with respect to
the current or any former business of the Company or of any partnership or joint
venture currently or at any time affiliated with the Company. To the Company's
knowledge, no state of facts exists as to environmental matters or Hazardous
Substances (as defined below) that involves the reasonable likelihood of a
material capital expenditure by the Company or that would otherwise have a
Material Adverse Effect. No Hazardous Substances have been treated, stored or
disposed of, or otherwise deposited by the Company or, to the Company's
knowledge, any other person, in or on the properties leased by the Company or by
any partnership or joint venture currently or at any time affiliated with the
Company in violation of any applicable environmental laws. The environmental
compliance programs of the Company comply in all material respects with all
environmental laws, whether federal, state or local, currently in effect. As
used herein, "Hazardous Substances" means any substance, waste, contaminant,
pollutant or material that has been determined by any governmental authority to
be capable of posing a risk of injury to health, safety, property or the
environment.
t. Certain Agreements of Officers and Employees. To the Company's
knowledge, no officer, employee or consultant of the Company or any of its
subsidiaries is in violation of any material term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, nonsolicitation agreement, confidentiality agreement, or any other
similar contract or agreement or any restrictive covenant relating to the right
of any such officer, employee, or consultant to be employed or engaged by the
Company or any of its subsidiaries because of the nature of the business
conducted or to be conducted by the Company or any of its subsidiaries or
relating to the use of trade secrets or proprietary information of others, and
to the Company's knowledge the continued employment or engagement of the
Company's and its subsidiaries' officers, employees or consultants shall not
subject the Company, or any of its subsidiaries or any Purchaser to any material
liability with respect to any of the foregoing matters.
No officer, consultant or key employee of the Company or any of its
subsidiaries whose termination, either individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect, has been terminated since
December 31, 2001, and to the knowledge of the Company, no such officer,
consultant or key employee has given notice to the Company or any of its
subsidiaries that he or she has any present intention of terminating, his or her
employment or engagement with the Company or any of its subsidiaries, except as
set forth on Schedule 3(t).
u. ERISA. Neither the Company nor any of its subsidiaries makes any
contributions to any employee pension benefit plan for its employees which plan
is subject to the Employee Retirement Income Security Act of 1974, as amended.
v. Transactions with Affiliates. Except as set forth in Schedule
3(v), there are no loans, leases, royalty agreements or other transactions
between (a) the Company or any of its
11
subsidiaries or any of their respective customers or suppliers, and (b) any
officer, employee, consultant or director of the Company or any person owning
five percent (5%) or more of the capital stock of the Company or five percent
(5%) or more of the ownership interests of the Company or any of its
subsidiaries or any member of the immediate family of such officer, employee,
consultant, director, stockholder or owner or any corporation or other entity
controlled by such officer, employee, consultant, director, stockholder or
owner, or a member of the immediate family of such officer, employee,
consultant, director, stockholder or owner.
w. Assumptions or Guaranties of Indebtedness of Other Persons.
Neither the Company nor any of its subsidiaries has assumed, guaranteed,
endorsed, or otherwise become directly or contingently liable on, any
Indebtedness or any other agreement of any other person except as set forth in
Schedule 3(x).
x. Investments in Other Persons. Except as set forth in Schedule
3(x), neither the Company nor any of its subsidiaries has made any loan or
advance to any person which is outstanding, nor is it committed or obligated to
make any such loan or advance, nor does the Company or any of its subsidiaries
own any capital stock, assets compromising the business of, obligations of, or
any equity, ownership or other interest in, any person. The Company's
subsidiaries are identified on Schedule 3(x); except as disclosed on Schedule
3(x), the Company owns, directly or indirectly 100% of the outstanding equity
interests in the subsidiaries listed on Schedule 3(x).
y. Books and Records. The books of account, ledgers, order books,
records and documents of the Company and its subsidiaries accurately and
completely reflect all material information relating to the business of the
Company and its subsidiaries, the location and collection of their respective
assets, and the nature of all transactions giving rise to the obligations or
accounts receivable of the Company or any of its subsidiaries.
z. U.S. Real Property Holding Corporation. Neither the Company nor
any of its subsidiaries is now or has ever been a "United States Real Property
Holding Corporation" as defined in section 897(c)(2) of the Code and section
1.897-2(b) of the Regulations promulgated by the Internal Revenue Service.
aa. Permits. The Company and each of its subsidiaries have all
licenses, permits, exemptions, consents, waivers, authorizations, rights,
certificates of occupancy, franchises, orders or approvals of, and have made all
required registrations with any governmental body or agency, domestic or
foreign, that are material to the conduct of the business of or the intended use
of any properties of the Company and such subsidiaries ("Permits"), except where
the failure to have any such Permit, either singly or in the aggregate, would
not have a Material Adverse Effect, and no material violations are or have been
recorded in respect of any Permit; and no proceeding is pending or, to the
knowledge of the Company or any of its subsidiaries, threatened to revoke or
limit any Permit, except for such violations or proceedings that would not,
either singly or in the aggregate, have a Material Adverse Effect.
12
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 5 and Section 6 of this
Agreement.
b. Form D; Blue Sky Laws; Current Report. The Company shall file a Form D
with respect to the Shares as required under Regulation D and provide a copy
thereof to each Purchaser promptly after such filing. The Company shall take
such action at its own cost and expense, as the Company shall reasonably
determine is necessary to qualify the Shares for sale to each Purchaser pursuant
to this Agreement under applicable securities or "blue sky" laws of the states
of the United States or obtain exemption therefrom, and shall provide evidence
of any such action so taken to each Purchaser.
c. Use of Proceeds. The Company shall use the proceeds from the sale of
the Shares for working capital and general corporate purposes.
d. Expenses. The Company shall pay to the Representative, or its
designee, up to $20,000 as reimbursement for the actual expenses incurred by the
Purchasers and their affiliates and advisors in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other agreements
to be executed in connection herewith, including, without limitation, attorney's
fees and expenses (the "Expenses"). Such amount shall be paid at the Closing.
e. Confidentiality. The Purchasers understand that the Company has not
made any public disclosure regarding the transactions contemplated by this
Agreement and agree that, except to the extent of any such public disclosure by
the Company, not to disclosure such information to any third party. In addition,
prior to the earlier of (i) the public announcement by the Company of such
information and (ii) March 10, 2003, the Purchasers shall not, and shall cause
their Affiliates not to, directly or indirectly through one or more
intermediaries, (A) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock of
the Company or (B) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock of the Company, whether any such transaction described in clause
(A) or (B) above is to be settled by delivery of Common Stock of the Company or
such other securities, in cash or otherwise.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
The obligation of the Company hereunder to issue and sell the Shares to
each Purchaser hereunder is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion.
a. The Representative shall have delivered such Purchaser's Purchase
Price to the Company in accordance with Section 1(b) above.
13
b. Each Purchaser shall have executed such Purchaser's signature page to
this Agreement and the Second Addendum to Registration Rights Agreement in
substantially the form attached hereto as Exhibit A (the "Addendum"), and
delivered the same to the Company.
c. Each Purchaser shall have delivered such Purchaser's Purchase Price in
accordance with Section 1(b) above.
d. The representations and warranties of each Purchaser shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date, which representations and warranties shall be true
and correct as of such date), and each Purchaser shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing Date.
e. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
f. The Letter Agreements in substantially the form attached hereto as
Exhibit B (the "Letter Agreements") shall have been executed by each of the
parties thereto and shall be in full force and effect.
g. The Company shall have received confirmation from Nasdaq Staff that
the Marketplace Rules do not require approval of the Company's stockholders for
the transactions contemplated by this Agreement.
6. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE
The obligation of each Purchaser hereunder to purchase such Purchaser's
Shares hereunder is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions are for such
Purchaser's sole benefit and may be waived by such Purchaser at any time in such
Purchaser's sole discretion:
a. The Company shall have executed the signature page to this Agreement
and delivered the same to such Purchaser.
b. The Company shall have delivered to such Purchaser a certificate or
certificates representing the Shares being purchased, registered in such
Purchaser's name as stated in Attachment 1 hereto (or in the names of such
Purchaser's nominee or nominees as may be specified to the Company at least 48
hours prior to the Closing Date), against payment therefor in accordance with
Section 1(a) above.
c. The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date, which
14
representations and warranties shall be true and correct as of such date) and
the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date. Each Purchaser shall have received a certificate, executed
by the Chief Executive Officer, President or Executive Vice President of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by any Purchaser.
d. No statute, rule, regulation, executive order, decree, ruling,
injunction, action or proceeding shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction or
any self-regulatory organization having authority over the matters contemplated
hereby which questions the validity of, or challenges or prohibits the
consummation of, any of the transactions contemplated by this Agreement.
e. The Purchasers shall have received a copy of resolutions, duly adopted
by the Board of Directors of the Company, which shall be in full force and
effect at the time of the Closing, authorizing the execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby, certified as such by the Secretary or
Assistant Secretary of the Company.
f. Each Purchaser shall have received an opinion of the Company's
counsel, dated as of the Closing Date in form and substance reasonably
satisfactory to the Purchasers.
g. Each Purchaser shall have received a copy of the Addendum duly
executed by the Company.
h. The Board of Directors of the Company shall have approved an amendment
(the "Rights Plan Amendment") to the Rights Agreement, dated as of September 11,
2001, by and between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent, as amended by Amendment No. 1 thereto dated as of November 13,
2001 and Amendment No. 2 thereto dated as of November 22, 2002, and the
Purchaser shall have received a copy of the Rights Plan Amendment in
substantially the form attached hereto as Exhibit C duly executed by the Company
and the Rights Agent.
i. The Company shall have delivered a Certificate of Adjustment pursuant
to Section 7(g) of its outstanding 10% Convertible Senior Secured Promissory
Notes due 2005 in substantially the form attached hereto as Exhibit D.
7. MISCELLANEOUS
a. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflict of laws provisions thereof. The parties hereto irrevocably consent
to the jurisdiction of the United States federal courts and the state courts
located in the State of New York in any suit or proceeding based on or arising
under this Agreement and irrevocably agree that all claims in respect of such
suit or proceeding may be determined in such courts. The parties hereto
irrevocably waive the defense of an inconvenient forum to the maintenance of
such suit or proceeding. Each of the parties hereto further agrees that service
of process upon it mailed by
15
first class mail shall be deemed in every respect effective service of process
upon it in any such suit or proceeding. Nothing herein shall affect the right of
any Purchaser or the Company to serve process in any other manner permitted by
law. The parties hereto agree that a final non-appealable judgment in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
b. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed execution page(s)
hereof to be physically delivered to the other party within five (5) days of the
execution hereof, provided that the failure to so deliver any manually executed
signature page shall not affect the validity or enforceability of this
Agreement.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor any Purchaser make any
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived other than by an instrument in
writing signed by the party to be charged with enforcement (the Company or the
Purchasers, as the case may be), and no provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and by the
Purchasers. For purposes of this Section 7(e), any instrument executed by
Purchasers holding a majority of the Shares purchased pursuant to this Agreement
shall bind all Purchasers.
f. Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be delivered personally or by responsible overnight
carrier or by confirmed telecopy, and shall be effective upon receipt or refusal
of receipt, if delivered personally or by responsible overnight carrier or
confirmed telecopy, in each case addressed to a party. The addresses for such
communications shall be:
If to the Company:
Boston Life Sciences, Inc.
00 Xxxxxxx Xxxxxx
0/xx/ Xxxxx
00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to any Purchaser, to the address set forth under such Purchaser's name
on Attachment 1 hereto.
Each party shall provide notice to the other parties of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns.
h. Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
i. Survival. The representations and warranties of the Purchasers set
forth in Section 2, the representations and warranties of the Company set forth
in Section 3, and the agreements and covenants set forth in Section 4 shall
survive the Closing until the expiration of the applicable statute of
limitations notwithstanding any due diligence investigation conducted by or on
behalf of any Purchaser. Moreover, none of the representations and warranties
made by the Purchaser or the Company herein shall act as a waiver of any rights
or remedies the Company or any Purchaser, respectively, may have under
applicable U.S. federal or state securities laws. The Company agrees to
indemnify and hold harmless each Purchaser and each other permitted transferee
of the Shares and all of their stockholders, officers, directors, employees,
partners, members, agents and direct or indirect investors and affiliates and
any of the foregoing person's agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as
a result of, or arising out of, or relating to any cause of action, suit or
claim brought or made by any person or entity (other than the Company or an
affiliate of such Indemnitee) against such Indemnitee during the 18 months
following the Closing Date and arising out of or resulting from (a) any
misrepresentation or breach of any
17
representation or warranty made by the Company in this Agreement or any other
certificate, instrument or document contemplated hereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement or
any other certificate, instrument or document contemplated hereby, (c) the
execution, delivery, performance or enforcement of this Agreement or any other
certificate, instrument or document contemplated hereby or (d) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Shares. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. In no
event shall the Company have any indemnification or contribution obligation with
respect to any settlement entered into by any Indemnitee without the prior
consent of the Company, which shall not be unreasonably withheld or delayed.
Notwithstanding any of the foregoing, no Indemnitee shall be entitled to any
indemnification or contribution to the extent such losses are found in a final
judgment by a court of competent jurisdiction to have resulted primarily and
directly from the gross negligence or willful misconduct of such Indemnitee.
j. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
k. Termination. In the event that the Closing shall not have occurred on
or before March 15, 2003, unless the parties agree otherwise, this Agreement
shall terminate at the close of business on such date. Notwithstanding any
termination of this Agreement, any party not in breach of this Agreement shall
preserve all rights and remedies it may have against another party hereto for a
breach of this Agreement prior to or relating to the termination hereof.
l. Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement. As such, the
language used herein and therein shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.
m. Additional Acknowledgment. Each Purchaser acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Agreement, that it has independently determined to enter into the transactions
contemplated hereby, that it is not relying on any advice from or evaluation by
any other Purchaser, and that it is not acting in concert with any other
Purchaser in making its purchase of securities hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Purchasers and the Company have caused this
Agreement to be duly executed as of the date first above written.
BOSTON LIFE SCIENCES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
PURCHASERS:
[PURCHASER SIGNATURE BLOCKS]
19
