Investment Representations and Agreements - Life Sciences Inc. and Louis D. Srybnik
LOUIS D. SRYBNIK
April 9, 1999
LIFE SCIENCES, INC.
Attn.: Alex A. Burns
2900 72nd Street North
St. Petersburg, Florida 33710
Re: Investment Representations and Agreements - Life Sciences,
Inc.
Gentlemen:
This letter sets forth my representations, warranties and
acknowledgements to Life Sciences, Inc., a Delaware corporation ("LSI", "you" or
the "Company"), and my related covenants and agreements with you, all in
connection with the offer to purchase from you shares of common stock, $.10 par
value per share, of LSI (the "Common Stock"), at $.4375 per share(1) as the
means of liquidating your indebtedness to me.
As of the close of business yesterday, April 8, 1999, you were indebted
to me in the aggregate amount of $29,342.13, consisting of $25,000.00 in
principal (the "Principal") and $4,342.13 in interest and other charges
(collectively, the "Other Charges"), all of which is due to me in connection
with one or more loans of money to you as reflected in your books and records.
During my current visit to Florida, you and I have agreed, and upon acceptance
of this letter (this "Investment Representation Letter" or this "Letter") by you
we hereby evidence our agreement, that the Principal shall be paid and
discharged by the sale and issuance by you, in a private offering to me, of
shares of Common Stock at $.4375 per share, and that the Other Charges shall be
forgiven and extinguished upon the date of your acceptance of this Letter
without any further act or deed by either of us. This would result in the sale
and issuance to me of a total of 57,142 whole shares (rounded down in
calculation) of Common Stock (the "Shares") as of the date this Letter. I hereby
subscribe for and agree to purchase the Shares.
It is in this context that I provide you with this Letter as an
inducement to your sale of the Shares to me, and I intend and realize that the
Company and its agents and representatives will rely on my representations,
warranties, acknowledgements, covenants and agreements set forth in this Letter
in connection with the sale to me of the Shares. I understand that reliance will
also be placed on the accuracy and completeness hereof in complying with the
obligations of applicable securities laws, and that failure to comply with those
obligations may have significant legal consequences.
(1) Representations, Etc. Therefore, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
preceding three paragraphs are incorporated herein by this reference, and I
represent, warrant, acknowledge, covenant and agree as follows:
(a) My business address is 140 - 53rd Street, Brooklyn,
New York 11232, and my social security number is 126-18-2397. Insofar as I am
aware, no commission or other remuneration is payable as a result of my proposed
purchase of the Shares, and no general solicitation or advertisement occurred in
connection therewith.
(b) I am an "accredited investor" within the meaning of
Regulation D under the
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(1) This amount is equal to the last reported high, low and closing prices of
the Common Stock in the over-the-counter market on March 26, 1999, the
closest available date for such information prior to the date hereof.
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Life Sciences, Inc. Investment Representation Letter
April 9, 1999 Page 2
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Securities Act of 1933, as amended ("Securities Act"), and the Florida
Securities and Investor Protection Act ("Florida Act") because my current
individual net worth exceeds $1,000,000, and/or I had individual income(2) in
excess of $200,000 in each of the two most recent years and have a reasonable
expectation of reaching the same income level in the current year. I also have
such knowledge and experience in financial and business matters that I am
capable of evaluating the merits and risks of my acquisition of the Shares and
of my investment in LSI. I understand there is no guaranty or assurance that you
ever will be profitable, and that your operating history includes a history of
losses. Accordingly, I am aware of the speculative nature of my proposed
investment and of the significant risks involved, and I represent and warrant
that I can bear the economic risk of such investment. I understand that an
investment in LSI is not suitable for any person who does not so understand such
risks. My investments in and commitments to all non-liquid investments,
including my proposed purchase of the Shares, are reasonable in relation to my
net worth, and I have adequate means of providing for my current needs and
possible contingencies without disposing of my proposed investment in the
Shares. All information I have provided to you concerning my financial position
and knowledge of financial and business matters is correct and complete as of
the date hereof.
(c) I have received and reviewed prior to my
determination to purchase the Shares and prior to the execution and delivery of
this Investment Representation Letter, all of the material information
concerning LSI, the Common Stock, the Shares and other matters that I considered
to be necessary or appropriate in connection with my investment decision.
(d) Among the documents I have had full and fair access
to prior to the execution and delivery of this Letter are all material contracts
to which LSI is a party or by which you are bound or benefitted, your historical
financial statements and related financial information as requested by me, and
the minute book of LSI containing the records of the actions of your Board of
Directors and stockholders.
(e) The Shares are to be acquired by me, in my name only,
for my own account, and no other person has any direct or indirect beneficial
ownership interest or other interest therein. The Shares are to be acquired by
me solely for investment purposes and not with a view to resale or distribution,
and I have no contract, undertaking, agreement or arrangement for any sale,
distribution or other transfer of any interest in any of the Shares, and no
present plans to enter into any such arrangement.
(f) I understand that the offer and sale of the Shares
has not been registered with or reviewed by the Securities and Exchange
Commission under the Securities Act, with or by any agency under the Florida
Act, or with or by any other state securities law administrator on the grounds,
among others, that the issuance and sale thereof is exempt from those
registration requirements on the grounds, among others, of not involving any
public offering and/or that the Shares in the context of this transaction are a
"covered security" as that phrase is defined in Section 18(a) of the Securities
Act and, accordingly, a "federal covered security" as that phrase is defined and
used in the Florida Act. I further understand that your, and your agents' and
representatives', reliance on such exemptions are, in material part, based on my
representations, warranties, acknowledgements, covenants and agreements set
forth herein. I also understand that no federal or state securities law
administrator has reviewed or approved any disclosure or other associated
material concerning the Shares, LSI, the Common Stock or any related matter, and
I acknowledge that my decision to acquire the Shares is of my own volition and
has not been recommended by you or by any federal or state securities law
administrator.
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(2) A measure of a person's income for this purpose is the amount of his
individual adjusted gross income (as reported on a federal income tax
return) increased by: (i) any deduction for a portion of long term capital
gains [Internal Revenue Code ("Code") Section 1202]; (ii) any deduction for
depletion (Section 611 et. seq. of the Code); (iii) any exclusion for
interest on tax-exempt municipal obligations (Section 103 of the Code); and
(iv) any losses of a partnership allocated to the individual limited
partner (as reported on Schedule E of Form 1040).
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Life Sciences, Inc. Investment Representation Letter
April 9, 1999 Page 3
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(g) I have been represented by such legal, tax,
accounting, financial and other advisors selected and retained by me as I have
found necessary to consult concerning my proposed purchase of the Shares and my
proposed investment. I have sufficient knowledge and experience in business and
financial matters that I am capable of evaluating all facets of the merits and
risks thereof [or I have used and relied upon in connection with my decision to
purchase the Shares, my own independent purchaser representative (insert
identity of purchaser representative or insert "N/A": N/A )
who does have such knowledge and experience and, therefore, the terms "I" and
"me" in this paragraph (g) shall include (as appropriate in the context) such
identified representative], and I investigated all facets of the merits and
risks of such proposed purchase prior to deciding to purchase the Shares. I
acknowledge that I have had full and fair access to all information concerning
LSI, the Shares (and also to other information considered by me to be necessary
or appropriate as a prudent and knowledgeable investor to enable me to make an
informed investment decision concerning the acquisition of the Shares), and that
I was previously informed that all documents, records and books pertaining to
such proposed investment were at all relevant times available for inspection and
review by me. I have determined the information necessary or appropriate for my
review of the merits and risks of my proposed investment, and I shall not seek
to hold you, or any of your agents or representatives, liable for matters
included in or omitted from my investigation based on such determination. I
acknowledge that I have had the opportunity to ask questions of, and have
received satisfactory answers from, you and your officers and directors
concerning LSI, the Shares and related matters. I also acknowledge that I have
had an opportunity to obtain additional information necessary to verify the
accuracy of such information and to evaluate the merits and risks of my proposed
investment. In my determination to acquire the Shares, no person made any
representation or warranty, expressed or implied, to me in any way relating
thereto except as expressly set forth or referenced herein, I have not relied on
any oral representation or warranty, and I did not rely on any offering
literature other than the documents and information made available to me as
provided herein.
(h) I understand that the Shares are not readily
transferable, and that there is only a limited over-the-counter market for the
Common Stock, no assurance is given by anyone that an active and substantial
public market will develop, or if developed that it will be sustained, I may not
be able to readily liquidate my proposed investment in the Shares in any event,
and I must bear the economic risk of an investment therein indefinitely. I also
understand there are substantial restrictions on the sale and transfer of the
Shares I am purchasing, and that subsequent sale or other transfer where
permitted will require registration thereof with applicable federal and state
securities law administrators and/or an opinion of my counsel acceptable to LSI
that any such transfer is exempt from such securities law requirements. I
further understand that legends, including a legend substantially as set forth
in Section (2) below, will be on the certificate issued to represent the Shares.
I agree not to offer, sell, pledge or otherwise transfer any of the Shares or
any interest therein absent compliance with applicable federal and state
securities laws and the referenced legend conditions. I understand that neither
the Company nor any other person has any obligation to register any Common Stock
or to provide me an opinion for the foregoing purposes.
(i) No representation or warranty by me herein contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein not misleading, and the
representations, warranties, acknowledgements, covenants and agreements set
forth herein shall survive the payment, issuance and delivery, of the Shares.
(j) I acknowledge that I understand the meaning and legal
consequences of the representations, warranties, acknowledgements, covenants and
agreements contained herein, and I agree to indemnify and hold LSI and its
agents and representatives harmless from and against any and all loss,
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Life Sciences, Inc. Investment Representation Letter
April 9, 1999 Page 4
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damage, liability or expense, including costs and reasonable attorneys' and
paralegal fees, to which any of them may be put or which they may incur by
reason of, or in connection with, any misrepresentation by me, any breach by me
of any representation or warranty, or any failure by me to fulfill any covenant
or agreement herein. The representations, warranties, acknowledgements,
covenants and agreements set forth in this Letter are intended to benefit each
of the persons described in the preceding sentence.
(2) Legends. The Shares shall be subject to any legend condition
necessary to assist in complying with applicable federal and state securities
laws, including such legends as may be appropriate under Regulation D as adopted
by the Securities and Exchange Commission under the Securities Act and the
legend set forth below. In any event, the certificate representing the Shares
shall have endorsed on it a legend reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE OFFERED FOR SALE,
SOLD, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
(3) Interpretation. Any descriptive headings of or in sections and
paragraphs of this Letter are inserted for convenience only and are not a part
of this Letter. No provision in this Investment Representation Letter shall be
construed against any party as the drafter. As used herein, the singular
includes the plural, the plural includes the singular and words in one gender
include the others; the terms "herein", "hereof", "hereunder" and similar
references refer to the whole of this Investment Representation Letter; and
"include", "including" and similar terms are not words of limitation. Whenever
possible, each provision of this Letter shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision shall be
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity only, without invalidating the
remainder of such provision or of the remaining provisions of this Letter.
(4) Miscellaneous. This Investment Representation Letter: (i)
contains the complete statement of all arrangements between LSI and me with
respect to its subject matter, and supersedes all previous agreements, promises,
arrangements and understandings, written or oral, relating to its subject
matter; (ii) cannot be assigned by either party without the other's prior
written consent, and cannot be modified, amended or waived except by an
instrument in writing signed by the parties necessary to the enforcement
thereof; (iii) shall be binding upon and shall inure to the benefit of our
respective successors, permitted assigns, heirs and legal representatives; (iv)
may be executed in any number of counterparts, each of which shall be deemed an
original instrument, but all such counterparts together shall constitute but one
agreement; and (v) shall be governed by, and construed and enforced in
accordance with, the laws of the State of Florida; provided, however, to the
extent Florida law is preempted by federal law, federal law shall apply. LSI and
I each hereby consent to the personal jurisdiction of the state and federal
courts located within the territorial limits of the United States District Court
for the Middle District of Florida, Tampa Division, agree that venue for any
litigation (or mediation or arbitration in connection therewith) related in any
way to this Letter shall only be in Pinellas County, Florida, or, if
appropriate, the United States District Court for the Middle District of
Florida, Tampa Division, and waive any objection to such exclusive jurisdiction
and venue. If either of us retains the services of counsel to enforce any
provision of this Letter, or because of litigation (or mediation or arbitration
in connection therewith) involving this Letter, the prevailing party shall be
entitled to recover, in addition to any other relief or remedy obtained, all
costs, expenses, and attorneys' and paralegal fees paid or incurred by it,
including costs, expenses and such fees at trial and any appeal,
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Life Sciences, Inc. Investment Representation Letter
April 9, 1999 Page 5
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whether in a court, administrative, arbitration or mediation proceeding.
Please sign and return the second copy of this Investment Representation Letter
to me if you find it satisfactory to acknowledge, evidence and confirm your
agreement with all of the foregoing.
Very truly yours,
/s/ Louis D. Srybnik
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Louis D. Srybnik
Confirmed, Accepted and Agreed:
LIFE SCIENCES, INC.
By: /s/ Alex A. Burns
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Alex A. Burns, Vice President
April 9, 1999