Form of Registration Rights Agreement
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made by
Celsion Corporation, a Maryland corporation (the "Company"), for the benefit of
the undersigned investor (the "Investor"; collectively, the "Investors"). This
Agreement shall become effective upon acceptance and closing in respect of the
related subscription for the Units being offered by the Company, each Unit
consisting of 40,000 shares of Common Stock of the Company, par value $0.01 per
share (the "Common Stock"), and a Warrant (the "Warrant") to purchase (i) 20,000
shares of the Common Stock at an Exercise Price of $0.50 per share, and (ii)
20,000 shares of the Common Stock at an Exercise Price of $1.00 per share.
R E C I T A L S
A. The Investor desires to purchase from the Company, and the Company
desires to issue and sell to the Investor, up to an aggregate of $1,000,000 of
Units, each Unit consisting of 40,000 shares of Common Stock and a Warrant to
purchase 40,000 shares of the Common Stock, as described in the Private
Placement Memorandum dated September 10, 1998, as amended November 12, 1998,
together with the Exhibits attached thereto (the "Offering Memorandum").
B. As partial inducement for the Investor to purchase the Securities,
the Company hereby undertakes to use its best effort to register under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), the Securities upon the terms and subject to
the conditions set forth herein.
The Company and the Investor hereby agree as follows:
1. Definitions. For the purposes of this Agreement:
(a) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or statements or similar documents in compliance with the
Securities Act and pursuant to Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of effectiveness of such
registration statement or document by the Securities and Exchange
Commission (the "SEC").
(b) The term "Registerable Securities" means (i) the Common
Stock, including the Common Stock issued upon exercise of the Warrants,
and (ii) any common stock of the Company issued as (or issuable upon
the conversion or exercise of any convertible security, warrant, right
or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of any Unit,
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Common Stock or Warrant, excluding in all cases, however, any
Registerable Securities sold by a holder of such Registerable
Securities in a transaction in which its registration rights under this
Agreement are not assigned.
(c) The Investor and assignees with registration rights
assigned to them pursuant to Section 8 of this Agreement may be
referred to herein collectively as "Holders" of Registerable Securities
and each may be referred to herein as a "Holder" of Registerable
Securities.
2. Piggyback Registration. (a) On an unlimited number of occasions
until December 31, 2000, and subject to the terms of this Agreement, in the
event the Company decides to register any of its Common Stock (either for its
own account or the account of a security holder or holders) on an SEC form
(other than S-4 or S-8 or successor forms) that would be suitable for a
registration involving Registerable Securities, the Company will: (x) promptly
give each Holder of Registerable Securities written notice thereof (which shall
include a list of jurisdictions in which the Company intends to qualify such
securities under the applicable Blue Sky or other state securities laws) and (y)
include in such registration (and in any related qualification under the Blue
Sky laws or other state securities laws), and in any underwriting involved
therein, all the Registerable Securities within twenty (20) days after delivery
of such written notice from the Company. Nothing contained in this Section 2
shall limit the ability of the Company to withdraw a Registration Statement it
has filed either before or after effectiveness.
(b) If the registration of which the Company gives notice pursuant to
Section 2(a) is for a registered public offering involving an underwriting, the
Company shall so advise the Holders of Registerable Securities as part of the
written notice given pursuant to Section 2(a) hereof. In such event, the right
of any Holder of Registerable Securities to registration shall be conditioned
upon such underwriting and the inclusion of such Holders' Registerable
Securities in such underwriting to the extent provided in this Section 2. All
Holders of Registerable Securities proposing to distribute their securities
through such an underwriting shall (together with the Company and the other
holders distributing their securities through such underwriting) enter into an
underwriting agreement with the Underwriter's representative for such offering;
provided that such holders shall have no right to participate in the selection
of the underwriters for an offering pursuant to this Section 2.
(c) In the event the Underwriters' representative advises the Holders
of Registerable Securities seeking registration of Registerable Securities
pursuant to this Section 2 in writing that market factors (including, without
limitation, the aggregate number of shares of Common Stock requested to be
registered, the general condition of the market, and the status of the persons
proposing to sell securities pursuant to this registration) require a limitation
of the number of shares to be underwritten, the Underwriter's representative may
exclude some or all Registerable Securities from such registration and
underwriting. In such event, the Underwriters' representative shall so advise
all Holders of Registerable Securities of the number of shares of Registerable
Securities that may be included in such registration and underwriting (if any),
and the number of shares of Registerable Securities that may be included in such
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registration and underwriting (if any) shall be allocated among all holders
seeking registration in proportion, as nearly as practicable, to the number of
shares proposed to be included in the registration by the Holder. The number of
shares of Registerable Securities to be included in such underwriting shall not
be reduced unless all other securities (other than those sold by the Company)
are similarly limited from the underwriting. No Registerable Securities or other
securities excluded from the underwriting by reason of this Section 2 shall be
included in such Registration Statement.
3. Obligations of the Company. When required under this Agreement to
effect the registration of the Registerable Securities, the Company shall, as
expeditiously as reasonably possible, use good faith efforts to:
(a) Prepare and file with the SEC a registration statement or
statements or similar documents (the "Registration Statement") with
respect to all Registerable Securities. The Company shall use good
faith efforts to keep such Registration Statement effective pursuant to
Rule 415 at all times until the earlier of (i) December 31, 2001, or
(ii) the date on which all Investors can sell any of the Registerable
Securities pursuant to Rule 144 of the Securities Act without
restriction under Rule 144(e) thereof.
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration
Statement as may be necessary to keep the Registration Statement
effective at all times until the earlier of (i) December 31, 2001, or
(ii) the date on which all Investors can sell their respective shares
of Registerable Securities pursuant to Rule 144 of the Securities Act
without restriction under Rule 144(e) thereof, and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement.
(c) Furnish promptly to the Holders of Registerable Securities
such numbers of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto, in conformity
with the requirements of the Securities Act, and such other documents
as the Holders of Registerable Securities may reasonably request in
order to facilitate the disposition of Registerable Securities.
(d) Register and qualify the securities covered by the
Registration Statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Investors
and prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements and to take such other
actions as may be necessary to maintain such registration and
qualification in effect at all times until the earlier of (i) December
31, 2001, or (ii) the date on which all Investors can sell their
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respective shares of Registerable Securities pursuant to Rule 144 of
the Securities Act without restriction under Rule 144(e) thereof, and
to take all other actions necessary or advisable to enable the
disposition of such securities in such jurisdictions, provided that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions or to provide
any undertaking or make any change in its charter or by-laws which the
Board of Directors determines to be contrary to the best interest of
the Company and its stockholders.
(e) In the event the holders of a majority in interest of the
Registerable Securities select underwriters for the offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering. The Investors shall also enter into and
perform their customary obligations under any such agreement including,
without limitation, customary indemnification and contribution
obligations.
(f) Notify the Holders of Registerable Securities, at any time
when a prospectus relating to Registerable Securities covered by the
Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. The
Company shall promptly amend or supplement the Registration Statement
to correct any such untrue statement or omission.
(g) Notify the Holders of Registerable Securities of the
issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for the
purposes. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible time.
(h) Permit a single firm of counsel designated as selling
stockholders' counsel by the holders of a majority in interest of the
Registerable Securities commencing at a reasonable period of time prior
to their filing, to review the Registration Statement and all
amendments and supplements thereto and shall not file any document in a
form to which such counsel reasonably objects.
(i) Make generally available to its security holders as soon
as practicable, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
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12-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration
Statement.
(j) At the request of the Holders of Registerable Securities,
furnish to the underwriters on the date that Registerable Securities
are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the
underwriters, and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as
is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters.
(k) Make available for inspection by the Holders of
Registerable Securities, any underwriters participating in the offering
pursuant to the registration and the counsel, accountants or other
agents retained by the Investors, all pertinent financial and other
records, corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by the Investors in connection with
the registration.
(l) If the Common Stock is then listed on a national
securities exchange, cause the Registerable Securities to be listed on
such exchange. If the Common Stock is not then listed on a national
securities exchange, use good faith efforts to facilitate the reporting
of the Common Stock on NASDAQ.
(m) Provide a transfer agent and registrar, which may be a
single entity, for the Registerable Securities not later than the
effective date of the Registration Statement.
(n) Take all actions necessary to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registerable Securities to be sold pursuant to
the Registration Statement and to enable such certificates to be in
such denominations and registered in such names as the Holders of such
Registerable Securities or any underwriters may reasonably request.
(o) Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investors of the Registerable
Securities pursuant to the Registration Statement.
4. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to each Investor that such Investor shall furnish to the Company such
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information regarding itself, the Registerable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registerable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.
5. Expenses of Registration. All expenses incurred in connection with
registration, filings or qualifications pursuant to Sections 2 and 3 hereof,
including, without limitation, all registration, listing, filing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one counsel
for the Investors shall be borne by the Company.
6. Indemnification. In the event any Registerable Securities are
included in a Registration Statement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor, the directors, employees, agents and
the officers of the Company, each person who signs the Registration
Statement, and each person, if any, who controls any of them, any
underwriter (as defined in the Securities Act) for such Holders of
Registerable Securities and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any losses,
claims, damages, expenses or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arising out of or
based upon any of the following statements, omissions or violations
(collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any state securities laws or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any
state securities laws; and the Company will reimburse the Investors and
each such underwriter or controlling person, promptly as such expenses
are incurred, for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that
the indemnity agreement contained in this Section 6(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, nor
shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with
such registration by the Investors or any such underwriter or
controlling person, as the case may be. Such indemnity shall remain in
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full force and effect regardless of any investigation made by or on
behalf of the Investors or any such underwriter or controlling person
and shall survive the transfer of the Registerable Securities by the
Holders of Registerable Securities.
(b) To the extent permitted by law, each Holder of
Registerable Securities, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers
who have signed the Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities Act or the
1934 Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement of any of its directors or
officers or any person who controls such holder or underwriter, against
any losses, claims, damages of liabilities (joint or several) to which
any of them may become subject, under the Securities Act, the 1934 Act
of other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity
with written information furnished by such Holder of Registerable
Securities expressly for use in connection with such registration; and
such Holder of Registerable Securities will reimburse any legal or
other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of such Holder of Registerable Securities,
which consent shall not be unreasonably withheld; and provided,
further, that the Investor shall be liable under this paragraph for
only that amount of losses, claims, damages and liabilities as does not
exceed the proceeds to such Investor as a result of the sale of
Registerable Securities pursuant to such registration.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to
the parties; provided, however, than an indemnified party shall have
the right to retain its own counsel, with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of
counsel for the indemnifying party, representation of such indemnified
party by the counsel retained by the indemnifying party, would be
inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
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such action shall relieve such indemnifying party of any liability to
the indemnified party under this Section 6 only to the extent
prejudicial to its ability to defend such action, but the omission so
to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise
than under this Section 6. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, promptly as such expense, loss,
damage or liability is incurred.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under this Section 6 to the extent permitted by
law, provided that (i) no contribution shall be made under
circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in this Section 6,
(ii) no seller of Registerable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of
Registerable Securities who was not guilty of such fraudulent
misrepresentation, and (iii) contribution by any seller of Registerable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registerable Securities.
7. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders of Registerable Securities the benefits of SEC Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit the Investors to sell securities of the Company to
the public without registration, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934
Act; and
(c) furnish to each Holder of Registerable Securities, so long
as such Holder of Registerable Securities owns any Registerable
Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC
Rule 144, the Securities Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing the Investors of any rule or
regulation of the SEC which permits the selling of any such securities
without registration.
8. Assignment of Registration Rights. The rights to have the Company
register Registerable Securities pursuant to this Agreement may be assigned by
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the Holders of Registerable Securities, subject to the Holders of such
Registerable Securities and such assignment being in compliance with the terms
of this Agreement and any agreements incorporated herein, and subject to such
assignment being in conformity with federal and state securities law, rules and
regulations, unless exempt therefrom, to transferees or assignees, of such
securities, provided, however, that such transferee or assignee within a
reasonable time after such transfer, furnishes the Company written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned; and provided, further,
that such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. The term "Investor" as used in
this Agreement shall include permitted assignees.
9. Miscellaneous.
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(a) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by registered mail, return-receipt request, addressed (i) if to the
Company, at Celsion Corporation, 00000-X Xxx Xxxxxxxx Xxxx, Xxxxxxxx, XX
00000-0000, Attention: Xxxxxxxxx Xxxxxx, PhD., Chairman of the Board and Chief
Executive Office, and (ii) if to an Investor, at the address set forth under his
name in the associated Subscription Agreement, or at such other address as each
such party shall furnish by notice given in accordance with this Section 9(a).
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right to remedy,
will not operate as a waiver thereof. No waiver will be effective unless and
until it is in writing and signed by the party giving the waiver.
(c) This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Maryland, as such laws are
applied by Maryland courts to agreements entered into and to be performed in
Maryland by and between residents of Maryland. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
(d) The Company will not, after the date of this Agreement, enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders of Registerable Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(e) The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given unless the Company has
obtained the written consent of holders of at least a majority of shares of the
Registerable Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof with respect to a matter which relates
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exclusively to the rights of Holders of Registerable Securities whose securities
are being sold pursuant to a Registration Statement and which does not directly
or indirectly affect the rights of other Holders of Registerable Securities may
be given by the holders of a majority of the shares of the Registerable
Securities being sold by such holders, provided that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(f) Subject to Section 8 hereof, this Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without limitation and without the need for an express
assignment, subsequent holders of Registerable Securities.
(g) This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts and by facsimile signatures, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Registerable
Securities. This Agreement supersedes all prior agreements and understanding
between the parties with respect to such subject matters.
Dated: December 1, 1998
CELSION CORPORATION
By:_________________________________
Name: Xxxxxxxxx X. Xxxxxx
Title: Chairman of the Board
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Name:
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