EXHIBIT 10.8
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this "AGREEMENT"), dated as of February ____, 1999, by
and among Boston Life Sciences, Inc., a Delaware corporation (the "COMPANY"),
and ________________________ _____________________________ (the "HOLDER").
WHEREAS:
A. The Company and the Holder are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by Section
3(a)(9) of the Securities Act of 1933, as amended (the "1933 ACT");
B. The Company and the Holder entered into a Subscription Agreement,
dated as of February 5, 1999 (the "SUBSCRIPTION AGREEMENT"), pursuant to which
the Holder purchased shares of the Company's Series B Convertible Preferred
Stock (the "SERIES B PREFERRED SHARES") which are convertible into shares of
common stock, $.01 par value per share, of the Company (the "COMMON STOCK"),
upon the terms and subject to the limitations and conditions set forth in the
Certificate of Designations, Preferences and Rights of the Series B Convertible
Preferred Stock, (the "SERIES B CERTIFICATE OF DESIGNATION");
C. The Subscription Agreements contemplate that the shares of Common
Stock underlying the Series B Preferred Shares are to be registered with the
Securities and Exchange Commission for public sale within 120 days following
closing, otherwise certain penalty provisions may apply. The designation also
provides for receipt of additional shares of Common Stock commencing 270 days
after issuance of the Series B Preferred Shares to guarantee a minimum rate of
return (the "ADDITIONAL SHARES"). If the closing bid price of the Company's
Common Stock is equal to or greater than $7.00 for five consecutive trading days
(the "MARKET OUT"), however, Additional Shares are not required to be issued.
The Market Out clause contemplates that the holder would have the opportunity to
liquidate his or her shares of Common Stock in the open market at a favorable
price. As currently in effect, however, the designation does not provide for a
delay of the commencement of the period of time for the Market Out until the
effective date of the registration statement covering the shares of Common
Stock.
D. The Company has authorized a new series of preferred stock, designated
as Series C Convertible Preferred Stock (the "SERIES C PREFERRED SHARES"),
having the rights, preferences and privileges set forth in the Certificate of
Designations, Preferences and Rights of the Series C Convertible Preferred Stock
attached hereto as EXHIBIT "A" (the "SERIES C CERTIFICATE OF DESIGNATION"),
which are convertible into shares of Common Stock upon the terms and subject to
the limitations and conditions set forth in the Series C Certificate of
Designation;
E. The Company desires to have the Holder exchange the outstanding Series
B Preferred Shares held by such Holder as of the Closing Date (as defined below)
for Series C Preferred Shares;
F. The Holder wishes to exchange all of the outstanding Series B
Preferred Shares held by such Holder as of the Closing Date (as defined below)
for Series C Preferred Shares;
G. All capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to them in either the Subscription Agreements and the
Series C Certificate of Designation.
NOW THEREFORE, the Company and the Holder, intending to be legally bound, hereby
agree as follows:
1. EXCHANGE OF SERIES B PREFERRED SHARES FOR SERIES C PREFERRED SHARES.
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a. EXCHANGE OF SERIES B PREFERRED SHARES FOR SERIES C PREFERRED
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SHARES. On the Closing Date (as defined below), (i) the Company shall issue to
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the Holder a number of Series C Preferred Shares equal to the number of
outstanding Series B Preferred Shares then held by such holder and (ii) the
Holder shall deliver all of the outstanding Series B Preferred Shares then held
by such Holder to the Company in exchange for such number of Series C Preferred
Shares.
b. CLOSING DATE. Subject to the satisfaction (or waiver) of the
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conditions thereto set forth in Section 5 and Section 6 below, the date and time
of the exchange of the Series B Preferred Shares and issuance of the Series C
Preferred Shares pursuant to this Agreement (the "CLOSING DATE") shall be on or
before February 19, 1999. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall occur on the Closing Date at the offices of
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP or at such other location as may be agreed to
by the parties.
2. HOLDER'S REPRESENTATIONS AND WARRANTIES. The Holder's representations and
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warranties as set forth in the Subscription Agreements are hereby fully
incorporated herein by reference. The Holder also represents and warrants that
none of the shares of Series B Preferred Stock owned by the Holder have been
converted.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The representations and
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warranties of the Company as set forth in the Subscription Agreements are hereby
fully incorporated herein by reference.
4. INCORPORATION OF AGREEMENT AND COVENANTS.
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a. INCORPORATION OF CERTAIN AGREEMENTS AND COVENANTS OF THE
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SUBSCRIPTION AGREEMENT. The agreements and covenants set forth in Sections 4,
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5, and 8 of the Subscription Agreement shall be incorporated herein by
reference.
b. NO CONVERSIONS OR TRANSFERS. The Holder shall not convert, sell
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or otherwise transfer any of the Series B Preferred Shares.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of the
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Company hereunder to exchange the Series B Preferred Shares for the Series C
Preferred Shares at the Closing 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:
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a. The Holder shall have executed this Agreement and delivered the
same to the Company.
b. The Holder shall have delivered the Series B Preferred Shares in
accordance with Section 1 above.
c. The Series C Certificate of Designation shall have been accepted
for filing with the Secretary of State of the State of Delaware.
d. The representations and warranties of the Holder as set forth in
this Agreement and the Subscription Agreement 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), and the Holder 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 Holder at or
prior to the Closing Date.
e. No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by or in 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.
6. CONDITIONS TO HOLDER'S OBLIGATION TO EXCHANGE OR PURCHASE. The obligation
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of the Holder hereunder to exchange the Series B Preferred Shares for the Series
C Preferred Shares at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these
conditions are for the Holder's sole benefit and may be waived by the Holder at
any time in its sole discretion:
a. The Company shall have executed this Agreement and delivered the
same to the Josephthal & Co., Inc. (the "Placement Agent"), on behalf of Holder.
b. The Company shall have delivered to the Placement Agent, on
behalf of Holder, duly executed certificates (in such denominations as the
Holder shall request) representing the Series C Preferred Shares in accordance
with Section 1 above.
c. The Series C Certificate of Designation shall have been accepted
for filing with the Secretary of State of the State of Delaware, and a copy
thereof certified by such Secretary of State shall have been delivered to the
Placement Agent, on behalf of the Holder.
d. The representations and warranties of the Company set forth in
this Agreement (including those incorporated herein by reference) 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 such time (except for representations and
warranties that speak as of a particular date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and
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conditions (including those incorporated herein by reference to the Subscription
Agreement) required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Placement Agent, on
behalf of the Holder, shall have received a certificate or certificates,
executed by an executive officer 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 the Placement Agent, on behalf of the Holder including, but not
limited to certificates with respect to the Company's Certificate of
Incorporation, By-laws and Board of Directors' resolutions relating to the
transactions contemplated hereby.
e. The Placement Agent, on behalf of the Holder, shall have received
an opinion of counsel to the Company substantially similar to the opinion
rendered in connection with the issuance of the Series B Preferred Shares.
f. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in 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.
7. MISCELLANEOUS
a. The Company and the Holder acknowledge and agree that:
(i) the Subscription Agreement executed by Holder and the
Company shall now apply to the Series C Preferred Shares received by Holder
pursuant to this Agreement and all references herein to the Subscription
Agreement shall therefore be deemed to include such Subscription Agreement as it
is so acknowledged and agreed to by Holder and the Company to apply to the
Series C Preferred Shares;
(ii) the deadline for the Company to prepare and file a
registration statement with the Securities and Exchange Commission pursuant to
the terms of the Subscription Agreement and warrants held by Holder shall be
extended to be twenty-one (21) days from the date of the last issuance of the
Series C Preferred Shares;
(iii) no commission or other remuneration was or is to be paid or
given directly or indirectly for soliciting the exchange contemplated hereby;
b. GOVERNING LAW. This Agreement shall be governed by and
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interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws.
c. COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may be
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executed in one 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 party hereto by facsimile
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transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.
d. HEADINGS. The headings of this Agreement are for convenience of
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reference and shall not form part of, or affect the interpretation of, this
Agreement.
e. SEVERABILITY. If any provision of this Agreement shall be invalid
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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.
f. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments
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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 the Holder makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.
IN WITNESS WHEREOF, the undersigned Holder and the Company have caused this
Agreement to be duly executed as of the date first above written.
BOSTON LIFE SCIENCES, INC.
By:____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Chief Financial Officer
INVESTOR
By:____________________________________________
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