-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PpjqMLSg85039e1n8o9UO5S08+inwbiAMlUuJkZ4EQ4l/XIhIE/QjnYkzEu2hrCd TgF2WFG8u1AzBcJ+ycMwiQ== 0001021408-03-004211.txt : 20030313 0001021408-03-004211.hdr.sgml : 20030313 20030313144904 ACCESSION NUMBER: 0001021408-03-004211 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20030312 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON LIFE SCIENCES INC /DE CENTRAL INDEX KEY: 0000094784 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 870277826 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06533 FILM NUMBER: 03602265 BUSINESS ADDRESS: STREET 1: 137 NEWBURY STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6174250200 MAIL ADDRESS: STREET 1: 137 NEWBURY STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: STRATEGIC MEDICAL RESEARCH CORP /DE DATE OF NAME CHANGE: 19790521 FORMER COMPANY: FORMER CONFORMED NAME: GREENWICH PHARMACEUTICALS INC DATE OF NAME CHANGE: 19920703 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 12, 2003 ----------------------- BOSTON LIFE SCIENCES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-6533 87-0277826 (State or Other Jurisdiction of (Commission (IRS Employer Incorporation) File Number) Identification No.) 20 Newbury Street, 5th Floor 02116 Boston, Massachusetts - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number: (617) 425-0200 ------------------------------------------------- Item 5. Other Events Private Placement On March 12, 2003, Boston Life Sciences, Inc. issued and sold an aggregate of 10,000,000 shares of its common stock at a purchase price of $1.00 per share in a private placement. The investors in the private placement included Robert L. Gipson, partners and employees of Ingalls & Snyder LLC and other individual investors. The Company is obligated to file a registration statement covering the resale of the shares if requested by the investors and may be required to include the shares in future registrations of securities by the Company. In connection with the private placement, two existing securityholders of the Company, Ingalls & Snyder Value Partners, L.P. and Robert L. Gipson, agreed to restrictions on the voting of any shares of common stock issued to them prior to June 1, 2005 pursuant to their conversion or exercise of certain outstanding convertible notes and warrants of the Company. These restrictions provide that if either securityholder converts or exercises all or any portion of the convertible notes and warrants prior to June 1, 2005, such securityholder will not (a) vote the shares of common stock received upon such conversion or exercise, (b) deposit any such common stock in a voting trust, or subject such common stock to any other arrangement or agreement with respect to voting, or (c) communicate with or seek to advise or influence any other person with respect to the solicitation or voting of such common stock in opposition to any matter that has been recommended by the Board of Directors or in favor of any matter that has not been approved by the Board of Directors. In recognition of these restrictions, the Company has amended its Rights Agreement, dated as of September 11, 2001, between the Company and Continental Stock Transfer & Trust Company, as rights agent, as amended, to provide that prior to June 1, 2005, these securityholders and their affiliates will be deemed not to beneficially own the convertible notes and warrants and any common stock issued or issuable upon their conversion or exercise for purposes of the Rights Agreement. As a result of the private placement, the conversion price of the Company's outstanding convertible notes has been reduced to $1.00 per share in accordance with the antidilution provisions of the notes. The Company did not incur any placement agent fees in connection with the private placement. The Company's press release announcing the private placement and the definitive agreements are filed as exhibits to this report. This summary description of the private placement is qualified in its entirety by reference to the documents filed as exhibits. Election of New Chief Executive Officer On March 12, 2003, the Company announced that Dr. Robert J. Rosenthal has been elected to the position of Chief Executive Officer by the Board of Directors of the Company. David Hillson, the Company's Chairman and current Chief Executive Officer, will remain Chairman of the Board of Directors. The Company's press release announcing this election is filed as an exhibit to this report Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits: 99.1 Press Release issued by the Company on March 12, 2003 (private placement). 99.2 Press Release issued by the Company on March 12, 2003 (election of Dr. Rosenthal). 99.3 Common Stock Purchase Agreement, dated as of March 12, 2003, by and among the Company and the investors named therein. 99.4 Second Addendum to Registration Rights Agreement, dated as of March 12, 2003, by and among the Company and the investors named therein (Exhibit A to Purchase Agreement). 99.5 Letter Agreements, each dated as of March 12, 2003, by and among the Company and the securityholders named therein (Exhibit B to the Purchase Agreement). 99.6 Amendment No. 3 to Rights Agreement dated as of March 12, 2003, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (Exhibit C to the Purchase Agreement). 99.7 Officer's Certificate of Adjustment of the Conversion Price of 10% Convertible Senior Secured Promissory Notes (Exhibit D to Purchase Agreement). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOSTON LIFE SCIENCES, INC. Date: March 13, 2003 By: /s/ Robert J. Rosenthal --------------------------------- Robert J. Rosenthal President and Chief Executive Officer EXHIBIT INDEX The following designated exhibits are incorporated by reference or filed with this report, as indicated: 99.1 Press Release issued by the Company on March 12, 2003 (private placement). 99.2 Press Release issued by the Company on March 12, 2003 (election of Dr. Rosenthal). 99.3 Common Stock Purchase Agreement, dated as of March 12, 2003, by and among the Company and the investors named therein. 99.4 Second Addendum to Registration Rights Agreement, dated as of March 12, 2003, by and among the Company and the investors named therein (Exhibit A to Purchase Agreement). 99.5 Letter Agreements, each dated as of March 12, 2003, by and among the Company and the securityholders named therein (Exhibit B to the Purchase Agreement). 99.6 Amendment No. 3 to Rights Agreement dated as of March 12, 2003, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (Exhibit C to the Purchase Agreement). 99.7 Officer's Certificate of Adjustment of the Conversion Price of 10% Convertible Senior Secured Promissory Notes (Exhibit D to Purchase Agreement). EX-99.1 3 dex991.txt PRESS RELEASE Exhibit 99.1 FOR IMMEDIATE RELEASE BOSTON LIFE SCIENCES COMPLETES $10 MILLION COMMON STOCK PRIVATE PLACEMENT March 12, 2003 Boston, MA--Boston Life Sciences, Inc. (NASDAQ: BLSI) announced today that it has completed a private placement of $10 million in common stock with a small group of individual investors. The Company's President, Dr. Robert J. Rosenthal commented, "We are pleased to close this financing, particularly during this difficult period for biotechnology. These funds will be used to support our operations through the period in which the Company expects to file an NDA for Altropane as a diagnostic for Parkinson's disease and to initiate Phase I clinical trials of Inosine in stroke." Under the terms of the financing, the Company issued 10,000,000 shares of common stock at a purchase price of $1.00 per share to the investors. There were no placement agent fees incurred in the transaction. Upon the request of the investor, the Company is obligated to file a registration statement covering the resale of the common stock. For additional information about the financing, interested parties should read the current report on Form 8-K to be filed by the Company with the Securities and Exchange Commission. BLSI is developing novel diagnostics and therapeutics for Parkinson's Disease (PD) and Attention Deficit Hyperactivity Disorder (ADHD) as well as treatments for cancer, autoimmune disease, and central nervous system disorders. BLSI's products in development include: ALTROPANETM and FLUORATECTM radioimaging agents for the diagnosis of PD and ADHD; Troponin I, a naturally-occurring anti-angiogenesis factor for the treatment of solid tumors; AF-1 and Inosine, nerve growth factors for the treatment of acute and chronic CNS disorders; novel therapies for the treatment of PD and ADHD; and transcription factors that may control the expression of molecules associated with autoimmune disease and allergies. Statements made in this press release other than statements of historical fact represent forward-looking statements. Such statements include, without limitation, statements regarding expectations or beliefs as to future results or events, such as the expected timing and results of clinical trials, discussions with regulatory agencies, schedules of IND, NDA and all other regulatory submissions, the timing of product introductions, the possible approval of products, and the market size and possible advantages of the Company's products. All such forward-looking statements involve substantial risks and uncertainties, and actual results may vary materially from these statements. Factors that may affect future results include: the availability and adequacy of financial resources, the ability to obtain intellectual property protection, delays in the regulatory or development processes, results of scientific data from clinical trials, the outcome of discussions with potential partners, regulatory decisions, market acceptance of the Company's products, and other possible risks and uncertainties that have been noted in reports filed by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K. For further information, please contact: Corporate Joseph Hernon Chief Financial Officer Boston Life Sciences, Inc. 617.425.0200 jhernon@bostonlifesciences.com EX-99.2 4 dex992.txt PRESS RELEASE Exhibit 99.2 FOR IMMEDIATE RELEASE BOSTON LIFE SCIENCES ANNOUNCES ELECTION OF DR. ROBERT J. ROSENTHAL AS CHIEF EXECUTIVE OFFICER March 12, 2003 Boston, MA--Boston Life Sciences, Inc. (NASDAQ: BLSI) announced today that Dr. Robert J. Rosenthal has been elected to the position of Chief Executive Officer by the Board of Directors. David Hillson, the Company's Chairman and current Chief Executive Officer, noted "Since joining the Company last July, Dr. Rosenthal has been able to fully integrate himself into the Company's operations, and is now well positioned to assume an expanded leadership role in the organization. Bob's diverse operating experience should prove critical as the Company's focus continues to migrate from a research orientation to a greater emphasis on commercial opportunities for our products, including partnering." Mr. Hillson will remain Chairman of the Board of Directors. BLSI is developing novel diagnostics and therapeutics for Parkinson's Disease (PD) and Attention Deficit Hyperactivity Disorder (ADHD) as well as treatments for cancer, autoimmune disease, and central nervous system disorders. BLSI's products in development include: ALTROPANETM and FLUORATECTM radioimaging agents for the diagnosis of PD and ADHD; Troponin I, a naturally-occurring anti-angiogenesis factor for the treatment of solid tumors; AF-1 and Inosine, nerve growth factors for the treatment of acute and chronic CNS disorders; novel therapies for the treatment of PD and ADHD; and transcription factors that may control the expression of molecules associated with autoimmune disease and allergies. Statements made in this press release other than statements of historical fact represent forward-looking statements. Such statements include, without limitation, statements regarding expectations or beliefs as to future results or events, such as the expected timing and results of clinical trials, discussions with regulatory agencies, schedules of IND, NDA and all other regulatory submissions, the timing of product introductions, the possible approval of products, and the market size and possible advantages of the Company's products. All such forward-looking statements involve substantial risks and uncertainties, and actual results may vary materially from these statements. Factors that may affect future results include: the availability and adequacy of financial resources, the ability to obtain intellectual property protection, delays in the regulatory or development processes, results of scientific data from clinical trials, the outcome of discussions with potential partners, regulatory decisions, market acceptance of the Company's products, and other possible risks and uncertainties that have been noted in reports filed by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K. For further information, please contact: Corporate Joseph Hernon Chief Financial Officer Boston Life Sciences, Inc. 617.425.0200 jhernon@bostonlifesciences.com EX-99.3 5 dex993.txt COMMON STOCK PURCHASE AGREEMENT 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 Ingalls & Snyder, 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, 1 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 & Gray, 885 Third Avenue, Suite 3200, New York, NY 10022. 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). 2 (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). 3 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 4 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 5 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 6 (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 7 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, 8 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 sue 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. 9 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 10 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. 20 Newbury Street 5/th/ Floor 16 Boston, Massachusetts 02116 Attention: Joseph Hernon Telephone: (617) 425-0200 Telecopy: (617) 425-0996 with a copy to: Ropes & Gray One International Place Boston, Massachusetts 02110-2624 Attention: Steven A. Wilcox, Esq. Telephone: (617) 951-7319 Telecopy: (617) 951-7050 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] 18 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/ Robert J. Rosenthal ------------------------- Name: Robert J. Rosenthal Title: President PURCHASERS: [PURCHASER SIGNATURE BLOCKS] 19 EX-99.4 6 dex994.txt 2ND ADDENDUM TO REGISTRATION RIGHTS AGREEMENT Exhibit 99.4 SECOND ADDENDUM TO REGISTRATION RIGHTS AGREEMENT This SECOND ADDENDUM TO REGISTRATION RIGHTS AGREEMENT (the "Addendum") is made and entered into as of March 12, 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 (the "Purchasers"). This Addendum supplements that certain Registration Rights Agreement, dated as of July 25, 2002, by and among the Company and the Initial Holders (as defined therein), as supplemented by the First Addendum thereto dated as of November 22, 2002 (the "Registration Rights Agreement"). Capitalized terms not defined herein shall have the meanings given to them in the Registration Rights Agreement. WHEREAS, as of the date hereof, the Purchasers are acquiring an aggregate of 10,000,000 shares of the Company's common stock (the "Shares") pursuant to that certain Common Stock Purchase Agreement dated as of March 4, 2003 by and among the Company and the Purchasers (the "Stock Purchase Agreement"); WHEREAS, the execution of this Addendum is a condition to the closing of the transactions contemplated by the Stock Purchase Agreement; and WHEREAS, Section 10(b) of the Registration Rights Agreement permits the Company, without the consent of any Holder, to extend the registration rights provided thereunder to additional persons who become holders of the Company's equity securities; NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein and other good and valuable consideration the mutual receipt and sufficiency of which is hereby acknowledged, the parties to this Addendum hereby agree as follows: -1- 1. Joinder of New Parties. By execution of this Addendum, each of the Purchasers not already party to the Registration Rights Agreement is hereby joined as a party to the Registration Rights Agreement and shall have all of the rights and obligations of a Holder thereunder. The Shares (and any securities of the Company issued or issuable with respect to the Shares by way of conversion, exchange, dividend or stock split or combination) shall constitute Registrable Shares under the Registration Rights Agreement (subject to the limitations set forth in the second sentence of the definition of Registrable Shares in Section 1 of the Registration Rights Agreement). 2. Entire Agreement; Counterparts. Except to the extent specifically supplemented by this Addendum, the Registration Rights Agreement shall remain unmodified, and the Registration Rights Agreement, as supplemented hereby, is confirmed as being in full force and effect. This Addendum 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. 3. Miscellaneous. This Addendum shall be governed by the provisions of Sections 12(e), (f) and (g) of the Registration Rights Agreement to the same extent as if set forth in their entirety herein. [The remainder of this page has been left blank intentionally.] IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the day and year first above written. BOSTON LIFE SCIENCES, INC. By: /s/ Robert J. Rosenthal -------------------------- Name: Robert J. Rosenthal Title: President PURCHASERS: [PURCHASER SIGNATURE BLOCKS] -3- EX-99.5 7 dex995.txt LETTER AGREEMENTS Exhibit 99.5 Boston Life Sciences, Inc. 20 Newbury Street, 5/th/ Floor Boston, Massachusetts 02116 (617) 425-0200 phone (617) 425-0996 facsimile March 12, 2003 Mr. Robert L. Gipson c/o Ingalls & Snyder, L.L.C. 61 Broadway, 31/st/ Floor New York, NY 10006 Dear Bob: Reference is made to the Common Stock Purchase Agreement (the "Purchase Agreement"), dated as of March 4, 2003, by and among Boston Life Sciences, Inc. (the "Company"), and each of the purchasers thereunder. Terms used but not otherwise defined in this letter agreement will have the meanings ascribed to such terms in the Purchase Agreement. As a condition to the transactions contemplated by the Purchase Agreement, this letter will confirm our agreement that, notwithstanding anything to the contrary in the terms of Warrant No. BLSI - 2002 - 54 issued by the Company exercisable for 1,000,000 shares of the Company's Common Stock (the "Warrant"), which Warrant is held by you as of the date hereof, from and after any exercise of all or any portion of the Warrant prior to June 1, 2005 into shares of the Company's Common Stock ("Underlying Shares"), you shall not (a) vote such Underlying Shares (including by execution of any written consent in lieu of a meeting of holders of securities of the Company or any class thereof), (b) deposit any such Underlying Shares in a voting trust, or subject such Underlying Shares to any other arrangement or agreement with respect to voting, or (c) communicate with or seek to advise or influence any other person with respect to the solicitation or voting of such Underlying Shares in opposition to any matter that has been recommended by the Board of Directors of the Company or in favor of any matter that has not been approved by the Board of Directors of the Company, including without limitation with respect to the election of directors of the Company. This letter constitutes the entire agreement among you and the Company and/or any of our respective affiliates, and supersedes all prior communications, agreements and understandings, written or oral, with respect to the matters set forth herein. This letter may be signed in counterparts, all of which shall constitute the same agreement and shall be governed by the domestic substantive laws of the State of New York. This letter shall bind and inure to the benefit of the parties and their respective successors and assigns; provided that this letter shall not bind any transferee of the Warrant or Underlying Shares, except for any transferee who controls, is controlled by, or is under common control with you or Ingalls & Snyder Value Partners, L.P. Mr. Robert L. Gipson March 12, 2003 - Page 2 of 2 If the foregoing is in accordance with your understanding, please sign this letter in the space indicated below. Very truly yours, Boston Life Sciences, Inc. By: /s/ Robert J. Rosenthal ------------------------ Name: Robert J. Rosenthal Title: President Accepted and agreed to as of the date first above written: /s/ Robert L. Gipson - --------------------- Robert L. Gipson Boston Life Sciences, Inc. 20 Newbury Street, 5/th/ Floor Boston, Massachusetts 02116 (617) 425-0200 phone (617) 425-0996 facsimile March 12, 2003 Ingalls & Snyder Value Partners, L.P. 61 Broadway New York, NY 10006 Attention: Robert L. Gipson, General Partner Dear Bob: Reference is made to the Common Stock Purchase Agreement (the "Purchase Agreement"), dated as of March 4, 2003, by and among Boston Life Sciences, Inc. (the "Company"), and each of the purchasers thereunder. Terms used but not otherwise defined in this letter agreement will have the meanings ascribed to such terms in the Purchase Agreement. As a condition to the transactions contemplated by the Purchase Agreement, this letter will confirm our agreement with Ingalls & Snyder Value Partners, L.P. ("ISVP") that, notwithstanding anything to the contrary in the terms of the 10% Convertible Senior Secured Promissory Notes, dated July 25, 2002 in the original aggregate principal amount of $4,000,000 and dated December 1, 2002 in the original aggregate principal amount of $143,333, and any additional notes which may be issued pursuant thereto in the future (collectively, the "Notes") and notwithstanding anything to the contrary in the terms of Warrant No. BLSI-2002-50 issued by the Company exercisable for 500,000 shares of the Company's Common Stock (the "Warrant"), which Notes and Warrants are held as of the date hereof by ISVP, from and after any conversion of all or any portion of the Notes or exercise of all or any portion of the Warrant, in each case prior to June 1, 2005, into shares of the Company's Common Stock ("Underlying Shares"), ISVP shall not (a) vote such Underlying Shares (including by execution of any written consent in lieu of a meeting of holders of securities of the Company or any class thereof), (b) deposit any such Underlying Shares in a voting trust, or subject such Underlying Shares to any other arrangement or agreement with respect to voting, or (c) communicate with or seek to advise or influence any other person with respect to the solicitation or voting of such Underlying Shares in opposition to any matter that has been recommended by the Board of Directors of the Company or in favor of any matter that has not been approved by the Board of Directors of the Company, including without limitation with respect to the election of directors of the Company. For the avoidance of doubt, it is also agreed that, in the event that ISVP distributes or otherwise transfers any Notes or Warrants or any Underlying Shares to its limited partners, this foregoing shall not be construed to prevent the general partners of ISVP who own shares of Common Stock of the Company in their individual capacities ("Personal Shares") from Ingalls & Snyder Value Partners, L.P. March 12, 2003 - Page 2 of 3 responding to unsolicited questions from such limited partners as to their intentions with respect to the voting of such Personal Shares. This letter also will confirm that, in its capacity as the Majority Note Holders (as defined in the Notes), ISVP consents to the transactions contemplated by the Purchase Agreement for all purposes under the Notes. This letter constitutes the entire agreement among ISVP and the Company and/or any of our respective affiliates, and supersedes all prior communications, agreements and understandings, written or oral, with respect to the matters set forth herein. This letter may be signed in counterparts, all of which shall constitute the same agreement and shall be governed by the domestic substantive laws of the State of New York. This letter shall bind and inure to the benefit of the parties and their respective successors and assigns; provided that this letter shall not bind any transferee of the Notes, Warrant or Underlying Shares, except for any transferee who controls, is controlled by, or is under common control with ISVP or Robert L. Gipson. [The remainder of this page has been intentionally left blank.] Ingalls & Snyder Value Partners, L.P. March 12, 2003 - Page 3 of 3 If the foregoing is in accordance with your understanding, please sign this letter in the space indicated below. Very truly yours, Boston Life Sciences, Inc. By: /s/ Robert J. Rosenthal -------------------------- Name: Robert J. Rosenthal Title: President Accepted and agreed to as of the date first above written: Ingalls & Snyder Value Partners, L.P. By: /s/ Robert L. Gipson -------------------- Name: Robert L. Gipson Title: General Partner EX-99.6 8 dex996.txt AMENDMENT NO. 3 TO RIGHTS AGREEMENT Exhibit 99.6 AMENDMENT NO. 3 TO RIGHTS AGREEMENT This AMENDMENT NO. 3 made as of the 12 day of March, 2003, between Boston Life Sciences, Inc., a Delaware corporation (the "Company"), and Continental Stock Transfer & Trust Company, a Delaware corporation ("Continental"), as Rights Agent under that certain Rights Agreement between the Company and Continental, dated as of September 11, 2001, as amended by Amendment No. 1 thereto dated as of November 13, 2001 and Amendment No. 2 thereto dated as of November 22, 2002 (the "Rights Agreement'). WHEREAS, on September 11, 2001, the Board of Directors of the Company authorized the issuance of Rights (as defined in the Rights Agreement) to purchase, on the terms and subject to the provisions of the Rights Agreement, one one-thousandth of a share of the Company's Series D Preferred Stock (each, a "Right"); WHEREAS, on September 11, 2001, the Board of Directors of the Company authorized and declared a dividend distribution of one Right for every share of common stock of the Company outstanding on the Dividend Record Date (as defined in the Rights Agreement) and authorized the issuance of one Right (subject to certain adjustments) for each share of common stock of the Company issued between the Dividend Record Date and the Distribution Date (as defined in the Rights Agreement); WHEREAS, the Distribution Date has not occurred; and WHEREAS, pursuant to Section 27 of the Rights Agreement, the Board has approved an amendment to certain provision of the Rights Agreement as set forth below; NOW, THEREFORE, the Rights Agreement is hereby amended as follows: 1. Section 1(x) is amended and restated in its entirety as follows: "(x) "Exempt Person" shall mean Ingalls & Snyder, L.L.C., a New York limited liability company, Ingalls & Snyder Value Partners, L.P., a New York limited partnership, or Robert L. Gipson, so long as such Persons, collectively, together with all Affiliates of such Persons, shall have Beneficial Ownership of less than 20% of the shares of Common Stock then outstanding; provided that for purposes of determining whether any such Persons qualify as an Exempt Person, such Persons and their Affiliates shall be deemed not to have Beneficial Ownership of any Excluded Securities (as defined below) until such date after June 1, 2005, if any, as any such Person or any Affiliate of any such Person shall acquire, or be deemed to acquire, Beneficial Ownership of shares of Common Stock of the Company in addition to the shares of Common Stock of which such Person or Affiliate has Beneficial Ownership on the close of business on June 1, 2005. The term "Excluded Securities" shall mean: (A) the Company's 10% Convertible Senior Secured Promissory Notes, dated July 25, 2002 (in the original aggregate principal amount of $4,000,000) and dated December 1, 2002 (in the original aggregate principal amount of $143,333), and any additional notes which may be issued pursuant thereto in the future (collectively, the "Notes"), and any shares of the Company's Common Stock issued or issuable upon conversion of the Notes; (B) the Company's Warrant No. BLSI-2002-50 exercisable for 500,000 shares of the Company's Common Stock and any shares of the Company's Common Stock issued or issuable upon exercise thereof; and (C) the Company's Warrant No. BLSI - 2002 - 54 exercisable for 1,000,000 shares of the Company's Common Stock and any shares of the Company's Common Stock issued or issuable upon exercise thereof." 4. Except as expressly amended herein, all other terms and conditions of the Rights Agreement shall remain in full force and effect. 5. This Amendment No. 3 may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one in the same document. [Remainder of page intentionally left blank] IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 as of the day and year first above written. BOSTON LIFE SCIENCES, INC. By: /s/ Robert J. Rosenthal ---------------------------- Name: Robert J. Rosenthal Title: President CONTINENTAL STOCK TRANSFER & TRUST COMPANY By: /s/ Steven Nelson ---------------------------- Name: Steven Nelson Title: Chairman of the Board and President EX-99.7 9 dex997.txt OFFICER'S CERTIFICATE Exhibit 99.7 BOSTON LIFE SCIENCES, INC. Officer's Certificate of Adjustment of the Conversion Price of 10% Convertible Senior Secured Promissory Notes Reference is made to those certain 10% Convertible Senior Secured Promissory Notes (the "Notes"), dated as of July 25, 2002 (original aggregate principal amount of $4,000,000) and December 1, 2002 (original aggregate principal amount of $143,333) issued by Boston Life Sciences, Inc., a Delaware corporation (the "Company") to Ingalls & Snyder Value Partners, L.P. (the "Holder"). Pursuant to Section 7(g) of the Notes, the Company hereby certifies that, by agreement between the Company and the Holder, an adjustment to the Conversion Price (as defined in the Notes) has occurred pursuant to the provisions of Section 7(e)(B) of the Notes, and the Holder of the Notes is hereby given notice of such adjustment and the facts giving rise thereto, all as set forth below. On March 4, 2003, the Company, the Holder and certain other parties entered into that certain Common Stock Purchase Agreement (the "Agreement") for the sale of ten million shares of the Company's common stock (the "Shares") at a price of $1.00 per share. In connection with the sale of the Shares by the Company under the Agreement and pursuant to the provisions of Section 7(e)(B) of the Notes, the Conversion Price of the Notes shall be reduced to $1.00 per share. No other adjustment to the terms of the Notes would be made on account of the transactions contemplated by the Amendment. [Remainder of page intentionally left blank] IN WITNESS WHEREOF, the undersigned has caused this written certificate to be executed by a duly authorized officer as of March 12, 2003. BOSTON LIFE SCIENCES, INC. By: /s/ Joseph P. Hernon -------------------- Name: Joseph P. Hernon Title: Chief Financial Officer Acknowledged and agreed, INGALLS & SNYDER VALUE PARTNERS, L.P. By: /s/ Robert L. Gipson -------------------------- Name: Robert L. Gipson Title: General Partner -2- -----END PRIVACY-ENHANCED MESSAGE-----