Exhibit 1.1
CAPITAL STOCK PURCHASE AGREEMENT
CAPITAL STOCK PURCHASE AGREEMENT, dated December 31, 2001, by and among
FOUNTAIN HOLDINGS, LLC, a Wyoming limited liability company, maintaining a
mailing address at c/o Eaglestone Capital Services, Inc., 000 Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxx, Xxxxxxxxxx 00000 (the "Seller"); XXXXXX X. XXXXXXXXX, XX., an
individual maintaining a mailing address at 00 Xxxx Xxxxx, Xxx Xxxx, Xxxxxxx,
00000 ("Xxxxxxxxx") and PARK STREET ACQUISITION CORPORATION, a Florida company,
maintaining a mailing address at 0000 00xx Xxx, Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx
00000 (the "Purchaser").
BACKGROUND INFORMATION
This Agreement sets forth the terms and conditions upon which Purchaser
is acquiring from the Seller and from Xxxxxxxxx and the Seller and Xxxxxxxxx are
selling and delivering to the Purchaser, respectively, free and clear of all
liabilities, obligations, claims, liens and encumbrances, (i) 2,000,000 shares
of the Class A Convertible Preferred Stock of Fountain Pharmaceuticals, Inc., a
Delaware corporation, (the "Company"), par value $.001 per share (the "Shares")
held in the name of Seller; and (ii) that Common Stock Purchase Warrant, dated
December 31, 1998, in the name of Xxxxxxxxx (the "Warrant") to purchase that
number of shares of the Company's Class A common capital stock as specified in
the Warrant and (iii) any residual securities owned by Xxxxxxxxx including stock
options (the Shares, Warrant, and any residual securities sometimes collectively
being referred to herein as the "Securities").
OPERATIVE PROVISIONS
ARTICLE 1
Purchase and Sale of Securities
1.1 Securities to be Sold. Subject to the terms and conditions of this
Agreement, at the Closing referred to in Section 1.4 hereof, the Seller and
Xxxxxxxxx shall sell and deliver to the Purchaser good, valid and marketable
title to the Securities, free and clear of all liabilities, obligations, claims,
liens and encumbrances, by delivering to the Purchaser one or more stock
certificates representing the Shares, duly endorsed in blank or accompanied by
one or more stock powers duly endorsed in blank, and in form for transfer
satisfactory to counsel for the Purchaser and by delivering a written assignment
of the Warrant and by delivering an assignment of any other residual securities
of the Company held by Xxxxxxxxx, and any necessary consents to assignment, in
form satisfactory to counsel for the Purchaser.
1.2 Purchase Price of the Securities. The aggregate purchase price to
be paid by the Purchaser to the Seller and to Xxxxxxxxx for the Securities shall
be Twenty Thousand and No/100 Dollars ($20,000.00) (the "Purchase Price") which
Purchase Price shall be distributed as follows:
a. Eight Thousand and No/100 Dollars ($8,000) shall be paid to Seller
in consideration of the transfer of 2,000,000 shares of the Company's Class A
convertible preferred stock; and
b. Twelve Thousand and No/100 Dollars ($12,000) shall be paid to
Xxxxxxxxx in consideration of the transfer of the Warrant and other securities
of the Company held in the name of Xxxxxxxxx.
1.3 Payment of Purchase Price. Subject to the terms and conditions of
this Agreement, in reliance on the representations, warranties and agreements of
the Seller and Xxxxxxxxx contained herein, and in consideration of the sale and
delivery of the Securities, the Purchaser shall pay the Purchase Price at the
Closing, by delivery of a certified or cashier's check, made payable to the
Seller and Xxxxxxxxx as set forth in section 1.2 above.
1.4 Closing. The closing of the sale and purchase of the Securities
shall take place at such time and place as may be agreed to by the parties but
no later than December 31, 2001 (the "Closing"). At the Closing, the Seller and
Xxxxxxxxx shall deliver to the Purchaser one or more certificates for the
Securities, in negotiable form, with all requisite stock transfer stamps or the
funds therefore attached and shall deliver to the Seller written assignments of
the Warrant and any residual securities and any necessary consents to
assignment, as applicable. Following such delivery, the Purchaser shall deliver
the Purchase Price to the Seller. Each party shall be responsible for all fees
and costs incurred by it or on its behalf in connection with the negotiation of
this Agreement and the Closing.
If at the Closing Seller or Xxxxxxxxx shall fail to deliver the
Securities in accordance with the requirements set forth herein, or if any of
the conditions specified hereunder shall not have been fulfilled, the Purchaser
shall, at its option, be relieved of his obligations under this Agreement
without thereby waiving any rights he may have by reason of such failure or
non-fulfillment. Conversely, if the Purchaser fails to close the transactions
herein contemplated for any reason other than a default or breach occasioned by
the Seller or Xxxxxxxxx under the terms hereof, or a failure of performance of
any of the conditions recited in Article 2 below, the Seller and Xxxxxxxxx may
pursue any legal rights or remedies then available to it, expressly including
the right to require the Purchaser's specific performance of this Agreement.
ARTICLE 2
Representations and Warranties of the Seller and Xxxxxxxxx
The Seller and Xxxxxxxxx, jointly and severally, represent, warrant and
agree as follows:
2.1 Title to Securities. The Securities are free and clear of all
liens, claims, encumbrances and restrictions, legal or equitable, of every kind,
except for certain restrictions on transfer imposed by federal and state
securities laws. The Seller and Xxxxxxxxx have full and unrestricted legal
right, power and authority to sell, assign and transfer the Securities to
Purchaser without obtaining the consent or approval of any other person or
governmental authority, and the delivery of such Securities to Purchaser
pursuant to this Agreement will transfer valid title thereto, free and clear of
all liens, encumbrances, claims and restrictions of every kind, except for
certain
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restrictions on transferability imposed by federal and state securities laws.
The execution of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a default under any provision of any
agreement by which the Seller or Xxxxxxxxx is bound.
2.2 Authorization. When executed and delivered by Seller and Xxxxxxxxx,
this Agreement will constitute the valid and binding obligations of the Seller
and Xxxxxxxxx, enforceable in accordance with its terms.
2.3 Consent. No consent, approval or authorization of or registration,
qualification, designation, declaration or filing with any governmental
authority or private person or entity on the part of Seller or Xxxxxxxxx is
required in connection with the execution and delivery of this Agreement or the
consummation of any other transaction contemplated hereby, except as shall have
been duly taken or effected prior to the Closing.
ARTICLE 3
Representations, Warranties and Covenants of the Purchaser
The Purchaser represents and warrants to, and covenants with, the
Seller and Xxxxxxxxx as follows:
3.1 Authorization. When executed and delivered by the Purchaser, this
Agreement will constitute the valid and binding obligations of the Purchaser,
enforceable in accordance with their respective terms.
3.2 No Contractual Violation. Neither the execution, delivery nor
performance of this Agreement by the Purchaser, including the consummation by
the Purchaser of the transactions contemplated hereby, will constitute a
violation of or a default under, or conflict with, any term or provision of the
any contract, commitment, indenture or other agreement, or of any other private
restriction of any kind, to which the Purchaser is a party or by which it is
otherwise bound.
ARTICLE 4
Additional Agreements and Covenants
The parties further agree and covenant as follows:
4.1 Delivery of Additional Instruments on Request. Each party agrees to
execute and deliver or cause to be executed and delivered at the Closing, and at
such other times and places as shall be reasonably agreed to, such additional
instruments as the other party may reasonably request for the purpose of fully
effecting the transactions herein contemplated.
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4.2 Agreements as to Conditions. Each party agrees to use its best
efforts to satisfy each and every of the conditions set forth in Sections 6. and
7., respectively, of this Agreement.
4.3 Release of Obligation owing to Xxxxxxxxx. Xxxxxxxxx, in
consideration of the Purchase Price and other good and valuable consideration,
shall, prior to the Closing, forever release and discharge the Company from its
obligation to him pursuant to that certain Credit Agreement, dated as of
December 31, 1998, and from any other debts or obligations owing to Xxxxxxxxx by
the Company, and shall deliver a written release of the above specified
obligations at the Closing in a form satisfactory to counsel for Purchaser.
4.4 Confidentiality. The parties hereto will maintain in confidence
written, oral or other information obtained from the other party regarding this
transaction or any other information unless such information is or becomes
publicly available through no fault of such party or the furnishing or use of
such information is required by or necessary or appropriate in connection with
legal proceedings.
4.5 Cross Default. Any breach of that certain Capital Stock Purchase
Agreement by and between Fountain Pharmaceuticals, Inc., Park Street Acquisition
Corporation and Xxxxxx X. Xxxxxxxxx (the "Company Agreement"), the terms of
which are incorporated herein by reference, shall constitute a breach of this
Agreement, including, but not limited to, any breach of the representations and
warranties contained therein.
4.6 Public Announcements. The parties hereto agree that no disclosure
or public announcement with respect to this Agreement, or any transactions
contemplated by this Agreement, shall be made by any party hereto without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.
4.7 Brokerage Fee. The parties hereto agree to indemnify and hold
harmless the other from and against any and all claims, losses, liabilities or
expenses which may be asserted against or suffered by any as a result of any
broker, finder or other person claiming any fee or commission by reason of
services rendered or alleged to have been rendered for or at the instance of a
particular party hereto with respect to the negotiation or execution of this
Agreement or to the delivery of the consideration herein specified.
ARTICLE 5
Indemnification
5.1 Indemnification. Xxxxxxxxx shall indemnify and hold harmless the
Purchaser at all times from and after the date of this Agreement against and in
respect of all demands, claims, actions, liabilities, damages, losses,
judgments, assessments, costs and expenses (including without
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limitation interest, penalties and attorney fees) asserted against, resulting
to, imposed upon or incurred by the Purchaser, directly or indirectly, and
arising from:
(a) All liabilities of the Company of any nature, whether accrued,
absolute, contingent or otherwise, existing as of the Closing, or arising out of
transactions entered into or facts or circumstances existing prior to that date;
or
(b) a breach of any representation, warranty, covenant or agreement
made or to be performed by the Seller or Xxxxxxxxx under this Agreement or a
breach of any representation, warranty, covenant or agreement made or to be
performed by the Company in the Company Agreement referred to above
(individually a "Claim" and collectively, the "Claims").
Notwithstanding the foregoing, the Purchaser shall only be entitled to
indemnification hereunder if Purchaser gives notice of a Claim to Xxxxxxxxx in
accordance with Section 5.2 by that day which is one year from the date of
Closing. Additionally, in no event shall the aggregate amount of losses for
which the Purchaser has the right to seek indemnification from Xxxxxxxxx exceed
Ten Thousand and N0/100 Dollars ($10,000).
5.2 Notification. The Purchaser shall, upon becoming aware or being put
on notice of the existence of a Claim with respect to which Purchaser may be
entitled to indemnification pursuant to this Article 5, promptly notify
Xxxxxxxxx in writing of such matter at the address specified in the preamble to
this Agreement.
5.3 Settlement and Defense of Claims. Except as hereinafter provided,
upon receiving notice in accordance with section 5.2, Xxxxxxxxx shall have the
right to settle at his own cost and expense all Claims which are susceptible of
being settled or defended, and to defend, through counsel of his own choosing
and at his own cost and expense, any third party action which may be brought in
connection therewith; provided, that Xxxxxxxxx shall be required to keep
Purchaser fully and currently informed as to all settlement negotiations and the
progress of any litigation; and provided further that the Purchaser shall have
the right to fully participate in the defense and settlement of any Claim at its
own expense.
ARTICLE 6
Conditions to Closing by the Purchaser
The obligation of the Purchaser to consummate the transactions herein
contemplated is subject to the satisfaction at or prior to the Closing of each
of the following conditions, and if the Purchaser shall not consummate such
transactions by reason of the failure of any of such conditions to be met as
herein provided, the Purchaser shall have no liability to the Seller or
Xxxxxxxxx.
6.1 Inspection Period. The Purchaser shall have until Closing in order
to satisfy itself that the Company and the Securities have been adequately
represented to the Purchaser (the "Inspection
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Period"). If at any time during this Inspection Period the Purchaser determines
not to proceed with the acquisition of the Securities, the Purchaser shall so
notify the Seller and Xxxxxxxxx in writing and the Purchaser shall have no
obligation to the Seller or Xxxxxxxxx, except as to the confidentiality
provisions set forth herein.
6.2 Truthfulness of Representations and Warranties. Each of the
representations and warranties of the Seller and Xxxxxxxxx contained in this
Agreement shall be true and correct as of the Closing with the same effect as
though such representations and warranties had been made on and as of such date.
Each such representation and warranty shall survive the consummation of the
transactions contemplated by this Agreement and shall remain in full force and
effect thereafter.
6.3 Performance. Each of the agreements of the Seller and Xxxxxx X.
Xxxxxxxxx, Xx. to be performed or complied with at or before the Closing
pursuant to the terms hereof shall have been duly performed or complied with.
6.4 Consents. All consents to the consummation of the transactions
contemplated herein which are required in order to prevent a breach of, or a
default under, the terms of any agreement to which the Seller or Xxxxxxxxx is a
party or is bound shall have been obtained.
6.5 No Litigation Threatened. No action or proceeding shall have been
instituted or, to the knowledge of the Seller or Xxxxxxxxx, shall have been
threatened before a court or other governmental body or by any public authority
to restrain or prohibit the transactions contemplated herein. No governmental
agency or body shall have taken any other action or made any request of the
Purchaser or the Seller or Xxxxxxxxx as a result of which the Purchaser deems it
inadvisable to proceed with the transaction.
6.6 Closing of Stock Purchase Agreement. Subsequent to or
simultaneously with the Closing, there shall occur a closing on the transaction
contemplated by the Company Agreement.
ARTICLE 7
Conditions to Closing by the Seller and Xxxxxxxxx
The obligation of the Seller and Xxxxxxxxx to consummate the
transactions herein contemplated shall be subject to the satisfaction of the
Seller on or prior to the Closing of each of the following conditions, and if
the Seller shall not consummate such transactions by reason of the failure of
any of such conditions to be met as herein provided, the Seller and Xxxxxxxxx
shall have no liability to the Purchaser.
7.1 Truthfulness of Representations and Warranties. Each of the
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct as of the Closing with the same effect as though such
representations and warranties had been made on and as of such date. Each such
representation and warranty shall survive the consummation of the transactions
contemplated by this Agreement and shall remain in full force and effect
thereafter.
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7.2 Performance. Each of the agreements of the Purchaser to be
performed or complied with on or before the Closing pursuant to the terms hereof
shall have been duly performed and complied with.
7.3 No Litigation Threatened. No action or proceeding shall have been
instituted or, to the knowledge of the Purchaser, shall have been threatened
before a court or other governmental body or by any public authority to restrain
or prohibit the transactions contemplated herein. No governmental agency or body
shall have taken any other action or made any request of the Seller or Purchaser
as a result of which the Seller deems it inadvisable to proceed with the
transaction.
ARTICLE 8
Miscellaneous Provisions
8.1 Notices. All notices or other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as properly given or made if hand delivered, mailed from within the
United States by certified or registered mail, or sent by prepaid telegram to
the applicable address appearing in the preamble to this Agreement, or to such
other address as either party may have designated by like notice forwarded to
the other party hereto. All notices, except notices of change of address, shall
be deemed given when mailed or hand delivered and notices of change of address
shall be deemed given when received.
8.2 Binding Agreements; Assignability. Each of the provisions and
agreements herein contained shall be binding upon and inure to the benefit of
the personal representatives, heirs, devisees and successors of the respective
parties hereto and shall be assignable by the Purchaser without the prior
written approval of the Seller or Xxxxxxxxx.
8.3 Entire Agreement. This Agreement, and the other documents
referenced herein, constitute the entire understanding of the parties hereto
with respect to the subject matter hereof, and no amendment, modification or
alteration of the terms hereof shall be binding unless the same be in writing,
dated subsequent to the date hereof and duly approved and executed by each
party.
8.4 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatever, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.
8.5 Headings. The headings of this Agreement are inserted for
convenience and identification only, and are in no way intended to describe,
interpret, define or limit the scope, extent or intent hereof.
8.6 Application of Florida Law; Venue. This Agreement, and the
application or interpretation thereof, shall be governed exclusively by its
terms and by the laws of the State of Florida. Venue for any legal action which
may be brought hereunder shall be deemed to lie in Hillsborough or Pinellas
County, Florida.
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8.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.8 Legal Fees and Costs. If a legal action is initiated by any party
to this Agreement against another, arising out of or relating to the alleged
performance or non-performance of any right or obligation established hereunder,
or any dispute concerning the same, any and all fees, costs and expenses
reasonably incurred by each successful party or his, her or its legal counsel in
investigating, preparing for, prosecuting, defending against, or providing
evidence, producing documents or taking any other action in respect of, such
action shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party(ies).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Purchaser
PARK STREET ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: President
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The Seller
FOUNTAIN HOLDINGS, LLC
By: /s/ Xxxxxx Xxxxxxxxx
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Its: Managing Member
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XXXXXXXXX
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Xx., Individually
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